Subprime City Confidential: Aug. 6, 2007
Bear: A Spector Removed, but a Specter Remains
Embattled Bear Stearns (BSC) offered a propitiatory push-out in an effort to quell rising fear—and anger—among investors about the extent of its subprime loan problems. The investment bank said veteran Warren Spector had resigned as president and chief operating officer, and named Spector's co-pilot, Alan Schwartz, as sole president. Meanwhile, Samuel Molinaro Jr. was to step into the COO job, effective immediately. Under happier circumstances, most Wall Streeters would welcome these step-ups, but battlefield promotions offer little cause for celebration. Indeed, analysts were not impressed. Standard & Poor's cut its rating on Bear shares to strong sell from sell while UBS (UBS) slashed its price target to $123 from $170. Meanwhile, BW's Roben Farzad points out in a video that Bear's sinking stock price could lead to an exodus of talent—and that cries may intensify for the ouster of Chief Executive James Cayne.
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