The Bear Stearns Blues continue

NEW YORK - Shareholders at Bear Stearns are still counting the cost of its shock sell-off to JP Morgan. Outrage from Bear Stearns staff over the Fed-brokered secret deal swiftly led rival JP Morgan to issue a five-fold rise of the initial $2 share price offered to $10 to stave off legal action. Bear Stearns' 14,150 directors and employees are understood to own 38.7% of the bank's shares. The revised deal values Wall Street's fifth-largest investment bank at around $2.1 billion, compared to $236 million under the first offer.

The new offer is still 88% down on share price last month - representing a loss for the bank's shareholder staff of about $3 billion. Freefalling subprime stock, compounded by the credit draught, took the 85-year-old Bear Stearns to the brink of bankruptcy. Other big losers are UK billionaire Joe Lewis, who bought 11 million shares in the firm last year, chairman James Cayne who reportedly owns 5.6 million shares in the bank, and chief executive Alan Schwartz who owns a further 1.03 million shares. The sale was co-ordinated with the US Federal Reserve, which gave approval after helping to provide $200 million emergency funding to Bear Stearns only days before. The Fed has agreed to provide credit for up to $30 billion of Bear Stearns' struggling assets.