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JP Morgan's trying to up the ante to $10 per share. The $5 strike calls were selling for pennies the Monday after the deal was announced when nobody wanted them. That would have been at least $5.50 per call profit, with very, very little upfront investment. An astute investor could have ridden Bear Stearns down from $105 to $3.50, and back up to $10 rather easily by not following the crowd, doing a little math and applying common sense. The $2 could never have flown without a value destorying fight. A basic premise in negotiations, "always leave something on the table for the other side". Let's look back to last week or two, after BSC fell from the $90's down to $3 in the previous following the Breaking of the Bear blog post:

March 13: It looks as if the prudent should start debating the ability of Bear Stearns to remain a going concern
March 17: BSC calls are almost free and the JP Morgan Deal is not signed in stone

I think I'm going to start doubling the price of this blog. Now it's free x 2! Blogger's have to eat, too.