March 17 (Bloomberg) -- Banks and brokerages may fall by half because Bear Stearns Cos.'s sale to JPMorgan Chase & Co. for about 93 percent less than its closing price last week will create a ``major negative revaluation'' of financial shares, Oppenheimer & Co.'s Meredith Whitney said.

``Financial stocks have further downside of as much as 50 percent based upon 1990/1991 multiples of tangible book values,'' Whitney, the analyst who correctly predicted Citigroup Inc. would reduce its dividend, wrote in a report today.

JPMorgan's $2-a-share offer is about 2 percent of Bear Stearns's book value at the end of the fourth quarter, she said. The fifth-largest U.S. securities firm's net worth was $84.03 a share at the end of November, according to Bloomberg data.

``As we believe we will begin to see goodwill writedowns during the first half of this year, we believe investors will focus more on tangible book value and stocks will quickly revalue to far lower levels,'' the New York-based analyst said.

JPMorgan agreed to buy Bear Stearns yesterday for about $240 million. Bear Stearns, whose shares have plunged 98 percent since their January 2007 record, is the second-biggest underwriter of U.S. mortgage bonds behind Lehman Brothers Holdings Inc.

Bear Stearns dropped 88 percent to $3.71 in 9:34 a.m. New York Stock Exchange composite trading. Lehman retreated 28 percent to $28.37. Goldman Sachs Group Inc. slumped 7.8 percent to $144.62. The Standard & Poor's 500 Financials Index retreated 4.2 percent to the lowest since April 2003.

Customer Withdrawals

Lehman fell after customer withdrawals at Bear Stearns raised concern that other Wall Street firms may face cash shortages. The stock has dropped more than 55 percent this year as the worst housing slump in at least a quarter century led to losses from mortgage-related securities.

``In light of what happened with Bear everything else is under pressure and everyone's looking to make sure they have the funding and liquidity,'' said Tim Smalls, head of U.S. trading at Execution LLC in Greenwich, Connecticut. ``We're seeing a classic case of selling first and asking questions later. Every global financial stock is getting whacked.''

Lehman denied that it's running short of cash. ``Our liquidity position has been and continues to be very strong,'' New York-based Lehman said in an e-mailed statement.

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.

Last Updated: March 17, 2008 09:44 EDT