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Why should one invest in jpmorgan chase Looking for informative answer.?
Wiki User
∙ 12y ago
To me the answer right now is simple: JP Morgan somehow managed to get the government to sell them Washington Mutual for a mere $1.9 Billion directly after the government took it over. Washington Mutual has billions in assets as well as the obvious deposit accounts from its customers. Of course you have to factor in the debt and losses JP Morgan will assume by taking over Washington Mutual.
However, the low price that they paid will allow JP Morgan to easily offset the losses from all of Washington Mutual's bad debt. In my opinion JP Morgan received a tremendous bargain and in the long run will turn the acquisition of Washington Mutual into massive profit. They can sell off the assets, some of which they will actually use (the Washington Mutual branches) for their own in the markets which they used to compete with Washington Mutual.
So I look at it as going to a garage sale and purchasing an ugly set of silver plates for a fraction of their worth. You know that if you polish them up you could easily sell them on eBay for a massive profit compared to what you paid. However the person selling them to you was the husband who had no clue what they were worth and didnt talk to the wife first =) You got lucky and dealt with the husband instead.
On a side note: The CEO of Washington Mutual was unaware of the takeover by the government until he received a phone call in mid flight. I am sure his heart stopped and he desperately wanted off the plane, when it landed of course.
- The CEO of Washington Mutual must not have been too worried after all he did receive a $7.5 million signing bonus and $11.3 million in severance pay for being the CEO for just 17 days... He must have actually jumped with joy when the call came...
Wiki User
∙ 12y ago
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