On this day in economic and financial history ...
JPMorgan Chase (NYSE:JPM) made an offer to acquire freefalling Bear Stearns for just $2 per share on March 16, 2008. The Sunday deal, a 93% discount to Bear Stearns' closing price of two days earlier, was put forth after an earlier bridge-loan agreement between the two banks and the Federal Reserve fell through. It was one of the watershed moments in the 2008 financial crisis, a signal that the problems plaguing the financial sector were both deeper and more systemic than previously believed. The minuscule offer price, at just $236 million in total, was a third of Bear Stearns' 1985 offer price, and a tiny sliver of the $170 shares fetched in March of 2007. The Fed, rather than offering loans to prop up Bear Stearns, provided financing to help JPMorgan close the transaction and promised up to $30 billion in funding to prop up Bear Stearns' "less-liquid assets."
Bear Stearns shareholders and employees were furious with the backroom deal, which all but wiped them out. Fierce protests pushed JPMorgan CEO Jamie Dimon to raise the offer to $10 per share less than two weeks later, in an effort to stem mass defections of key talent and avoid an outright shareholder revolt. This offer pushed Bear Stearns' shares above the offer price to $11.25, but it proved immaterial when the $10-per-share sale price was approved at the end of May. Bear Stearns' tortured saga was over, but the financial crisis had yet to enter high gear.
Might as well call it a day
On the other side of the coin from the wild crisis days is the dullness of March 16, 1830, the slowest day in New York Stock Exchange (UNKNOWN:UNKNOWN) history. That day, a mere 31 shares exchanged hands -- 26 shares of the United States Bank and five shares of Morris Canal and Banking, at a total value of just $3,470. That was low even by 1830s standards, as the first years of that decade typically saw at least 1,000 shares traded on a given day. Maybe stockbrokers would have been better off going fishing.
Up, up and away!
Robert Goddard inaugurated the age of modern rocketry when he launched the first liquid-fueled rocket into the sky over Auburn, Mass., on March 16, 1926. Like other first flights, Goddard's first rocket wasn't especially impressive by modern standards. The liquid oxygen and gasoline-fueled rocket rose 40 feet in the air over 2.5 seconds, traveling 185 feet across the earth before crashing.
Goddard continued to experiment with rocketry until his death in 1945, amassing more than 200 rocket-related patents in the process. His work helped lay the foundation of the Apollo program, which sent men to the moon and produced many technological advances that continue to benefit humanity today.
The auto industry represents
General Motors (NYSE:GM) joined the Dow Jones Industrial Average (DJINDICES:^DJI) for the first time on March 16, 1915. It became the first automaker ever to join the prestigious index at a time when there were only 12 components, and no other component produced a consumer-focused finished product. The automaker's addition was an early indicator of the automaker bubble that would begin two years later, which produced incredible gains for GM and other automakers that had successfully adopted Ford's (NYSE:F) assembly-line innovations for their own production.
Unfortunately, GM wouldn't help buoy the Dow during this boom time -- it was replaced on the index by Studebaker less than two years later. GM would return to the Dow for an extended stay in 1925, at which point it was one of three automakers (but the only consumer automaker, as the other two built industrial machines) on a 20-component index.
Two massive auto milestones
GM and Ford both experienced notable production milestones on March 16. GM built its 100 millionth car, an Oldsmobile Toronado, on March 16, 1966. The Toronado was a well-regarded car that won Motor Trend's Car of the Year, and it was also the first front-wheel-drive production car in the United States in nearly three decades. Eight years earlier, on March 16, 1958, Ford announced the production of its 50 millionth automobile, a Thunderbird. The milestone car was to be painted green in honor of St. Patrick's Day, and it was donated to the American Cancer Society for a fundraising raffle.