The Bear Stearns weekend
Impact
Bear Stearns −98% in 72 hours
What happened
Over a single weekend, internet-driven rumors about Bear Stearns's liquidity became a self-fulfilling fact. Counterparties pulled credit lines between Thursday and Sunday. By Sunday night JPMorgan bought Bear for $2 per share, down from $172 a year earlier.
Context
The Bear weekend was the first time a major US investment bank failed essentially because of how fast information moved online. Trust collapsed faster than any regulator could respond, and the structure JPM acquired the next week was legally a different company.
Era
04 · Internet & Early Social
Message boards, blogs, early Twitter democratized financial commentary. Anyone with an audience could move a market. The pump-and-dump went digital.
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Other events in this era
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