Bear Stearns was the oldest Wall Street firm to fall in 2008 — sold for $10 a share

Bear Stearns was founded in 1923 by Joseph Ainslie Bear and Robert B. Stearns as an investment bank and brokerage. It grew into one of Wall Street's most profitable firms, known for its aggressive trading culture and dominance in mortgage-backed securities. At its peak, Bear had total capital of roughly $66.7 billion and employed 14,000 people. By fiscal 2006, its stock traded at $172 per share.

The firm was deeply exposed to subprime mortgages. In June 2007, two of its hedge funds that had invested heavily in subprime mortgage securities collapsed, losing nearly all their value. Bear Stearns bailed out one fund with a $3.2 billion loan. In August 2007, co-president Warren Spector resigned. By November 2007, Bear reported its first loss in 83 years and wrote down $1.2 billion in mortgage-related assets. The stock fell from $172 to just over $30.

The crisis accelerated in March 2008. Bear's liquidity pool — the cash it held to fund daily operations — dropped from $18.1B on 10 March to $2B on 13 March, as counterparties refused to trade with it. The firm had $395B in total assets supported by only $11.1B in net equity — a leverage ratio of 35.6 to 1. On 14 March, the Fed's New York branch provided a $25B emergency loan. Over the weekend of 15–16 March, JPMorgan Chase agreed to acquire Bear in a stock swap valued initially at $2 per share — roughly $260M for a firm valued at $20B the year before.

After intense protests from Bear shareholders, JPMorgan raised the offer to $10 per share, or roughly $1.2 billion. The Federal Reserve facilitated the deal by providing a $29 billion loan to a special purpose vehicle, Maiden Lane LLC, that purchased $30 billion of Bear's risky assets — JPMorgan contributed $1 billion subordinated. The acquisition was completed on 30 May 2008. The Bear Stearns brand was phased out by January 2010. The failure of a major investment bank that had survived the Great Depression triggered a panic that spread to Lehman Brothers and AIG six months later.