The Cayne Mutiny

Are Jimmy Cayne's days at Bear Stearns numbered?

Well, that is what Charlie Gasparino is reporting. After the close on Friday, CNBC ran a piece in which Gasparino intimated that a revolt was building at Bear, with disillusioned employees looking to get rid of him once and for all. Not only that, but Warren Spector might still be in the picture, if the employees have anything to say about it. Those who are still left standing seem to be taking a different strategy, putting heat on Cayne via the media.

Cayne's problems are legion. He is having trouble finding a buyer for the 20% stake in Bear he has been trying to peddle to Chinese buyers, who have recently gotten a lesson in high finance, American-style, after getting spanked on subprime paper and an equity interest in the sinking stock of Blackstone group. Their reticence is not surprising given their recent experience.

Warren Spector has yet to take a new position on the Street, and if he is smart he is still relaxing on Martha's Vineyard with his wife enjoying the splendid late summer weather. The rumors Gasparino dredged up should extend the shelf life of the recent speculation regarding Spector. Gasparino stated "I obviously didn't take a survey of the entire firm, but I spoke to plenty of key people there, and there is a lot of dissension there."

Bear Stearns' stock is holding just above its recent lows, and if the stock cracks $100 for any sustained period the knives might just come out. For now its business as usual for Cayne, as he continues to smoke cigars in the hallways and executive dining room at Bear's Madison Avenue headquarters.

But if Gasparino is on the mark, the next leg down in Bear's stock might just seal Jimmy's fate.

Update

This morning British investor Joseph Lewis filed with the SEC, having accumulated a 7% share in Bear Stearns stock. Is he working in concert with some insiders at the firm to gain support for a Cayne ouster? Their was no language in the filing that would indicate so, but it is the latest plot twist in this story. Stay tuned, this could get a little more interesting.

Currency Trader Joseph Lewis Buys Bear Stearns Stake
Bloomberg

More Trouble at Bear
CNBC
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No position BSC

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