Analysts expected Bear Stearns to post its first-ever loss today, they just expected it to be smaller. After $1.9 billion in subprime writedowns, the company posted a $6.91 loss per share, dwarfing the $1.82 analysts predicted. Executives gave up their bonuses, as revenue from debt sales and trading were wiped out, Bloomberg reports. “They’ve got a myriad of problems,” one analyst said.
The writedowns eclipsed the company’s $1.2 billion forecast. While many of the firm’s competitors have taken bigger hits, Bear Stearns’ stock has fallen further because of over-reliance on fixed-income. “Their problem is they're not as diversified,” an analyst explained. “They’re kind of a bond shop.” A recession would likely help the company, slowing rivals and increasing the price of bonds.