Rochester,NY 8/25/2009 1:00:55 AM
JPMorgan Chase & Co. JPM, Move Warrants Second Guess
JPMorgan Chase & Co.
JPMorgan Chase. JPM, may have outsmarted itself when it chose to let an auction determine the price for warrants the federal government obtained in its banking sector bailout last fall, but it won't be the end of the world.
JPMorgan in June eagerly became one of the first big banks to repay the Treasury Department's preferred equity investment made through the Troubled Asset Relief Program. CEO Jamie Dimon has long maintained that the company had never needed the $25 billion investment, and had only accepted it at the government's insistence that all of the nation's biggest banks stand united so as not to make some appear weaker than others.
JPMorgan explored repurchasing the warrants last month, but could not agree on a price with the government. The company ended up on July 7 waiving its right to buy the warrants, allowing the Treasury to auction them.
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