As Bear Stearns ( BSC) CEO James Cayne's tenure reportedly goes up in smoke, investors hope the beleaguered investment bank's shares are ready to get high. Cayne is expected to step down from the CEO post that he has held for the past 15 years and to be replaced by Bear's president, Alan Schwartz, according to The Wall Street Journal. The move, first reported late Monday by the online version of the Journal, comes after a litany of negative media reports and abysmal performance cast Cayne as a disconnected chief executive more interested in playing bridge -- and allegedly smoking marijuana, according to a Journal report in the fall -- than in running the Bear franchise.
Cramer: Bear Stearns' Cayne Should Go
On the heels of the management news, Bear's stock was down fractionally to $75.65 in morning trading. Cayne, who had worked at Bear since 1969, is expected to retain the chairman title -- a move that continues to upset some observers who believe that the nearly 74-year-old executive should relinquish all of his duties in order to make way for fresh talent. "Now, to give this guy a position as chairman is another fact that this board is simply anti-shareholders," said Richard Bove, an analyst at Punk Ziegel. "Cayne's walked away with more than $100 million in shareholder equity, and the shareholders have walked away with nothing." According to the Journal's report, it was a growing contingent of shareholders that ultimately began to convince Cayne that letting go of the CEO seat now may be the best move for all parties.