|Morgan's Big Mo |
Ailing financial firm gets a rumor-induced boost
David Stumpf, a bank analyst with A.G. Edwards, says buyout rumors are bound to surface in the market when a stock has been as beaten up as J.P. Morgan and its "management team is under tremendous pressure." (Stumpf has a hold rating on the bank's shares. A.G. Edwards has done investment banking work for J. P. Morgan in the past year).But Stumpf, like other industry experts, said he saw little substance behind the rumor. He noted that in this uncertain economic environment it would be difficult for any bank to pull off a deal for J.P. Morgan. Bank One, the nation's sixth-largest bank in terms of assets, has a market capitalization of $46 billion. Close behind is J.P. Morgan with a market cap of about $41 billion. Typically, when a company uses stock to acquire a similarly sized company, it has a dilutive impact on the acquiring company's shares, something that could anger its own shareholders. One thing that's intriguing about the rumor, however, is the possibility of Bank One Chairman Jamie Dimon stepping in to take over the reins at J.P. Morgan. Dimon had been a fast-rising star at Citigroup ( C) and a one-time prot¿g¿ of Citigroup Chairman Sanford Weill, before being forced out of Citi in a power struggle. Still, some say an easier way for Dimon to take over J.P. Morgan would be to simply make a play for Harrison's job.