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davepamn

M¢25 Funded By Mahalo ? | July 17, 2009 02:23 PM

Are shareholders carrying the cost of the financial bailouts?

When Bank of America offered to buy Merrill Lynch for 50 billion dollars, BOA share price dropped 21.4 percent.

21 percent was before, the shareholder knew the extent of Merrill Lynchs losses.

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hushnow

July 20, 2009 12:40 AM

I don't think that shareholders are carrying the cost, of the financial bailout. It seems more like they are sharing the burden with the rest of America's tax payers.

The difference I see is that shareholders know that there is a risk of the stock prices dropping dramatically. They also realized that there was a chance for profit by investing in BoA. American tax payers on the other hand, didn't have much of a choice in whether or not they wanted to "invest" in BoA. And I highly doubt that if there ever is a profit to be made in BoA that American citizens will be getting back their money.

I could be wrong on that-- it's just my speculations.

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davepamn

July 20, 2009 02:19 AM

Bear Stearns dropped to $2 a share. I would say they carried the cost of the buyout.

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