Rochester, NY 8/25/2009 7:33:30 PM
JPMorgan Chase & Co. JPM, JPMorgan selling warrants an option
JPMorgan Chase & Co. JPM
JPMorgan may have thought for good riddance for itself when it chose to let an auction name the price for warrants the federal government obtained in its banking sector bailout last fall, but it doesn’t stop the game. JPMorgan very eagerly became one of the first big banks to repay in June the Treasury Department's preferred equity investment made through the Troubled Asset Relief Program. The company had never needed the $25 billion investment for it has long maintained by CEO Jamie Dimon, and so as not to be threatened as the weakest link they 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.
Somehow retiring the TARP Investment was just the first step in moving out from under government control. Treasury still own warrants buying JPMorgan stock, which would probably dilute shareholders if exercised. JPMorgan already did try exploring repurchase 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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