Who owns Bear?

With the stock zooming past the price Morgan agreed to pay, many people have opined. Here's the WSJ and Dealbook (with some links). Here's a quick summary:

• Bear bondholders who want the deal to go through or are hedging against the possibility it won't. They'll likely vote for the deal, depending on how much stock and bonds they end up owning.
• Bear CDO holders who want the deal to go through because Bear becomes a better risk.
• Speculators who think a better deal may come along or simply that Bear's fortunes will improve over the next year that the sale agreement is in force.

But what does this all mean?

• Given who owns the shares, the deal might go through even if Bear's stock is worth significantly more than it is now.
• The market will catch onto who owns the shares and this will depress the share price despite any rise in the underlying value.
• The Delaware courts will hold that the directors' fiduciary duties override the agreement, so they have to recommend a vote against, or shop the company. See Gordon Smith on this.

Which, of course, begs the question, fiduciary duties to whom.

And, more broadly, the question of what do shareholders want. The assumption is that they have a vote because they're interested in maximizing the value of the firm – i.e, expected profits or cash flows. On this assumption hangs not only director fiduciary duties, but also proposals to clean up so-called "empty voting" – that is, the separation of voting from ownership. But Bear shows that in our complex financial markets it's not so simple.