What I love about this beat is that no matter how much I blog about subprime mortgages, it never gets old. They are like the gift that keeps on giving.
Seems that subprime mortgages were the trigger for cancelling the Everquest Financial IPO. Bear Stearns‘ hedge funds, run by Ralph Cioffi, who was slated to become co-CEO of Everquest Financial, had invested heavily in the risky mortgages. But with the subprime mortgage debacle, the funds began losing money and investors panicked.
Everquest Financial invested in collateralized debt obligations, or CDOs, which were backed by, you guessed it, subprime mortgages. Now Bear Stearns is being bailed out by rivals, and pundits say its subprime woes have made it a takeover target.
So what now for Cioffi? Can he regroup? Or will he leave Bear Stearns under a cloud? Will Everquest Financial be laid to rest forever or will it be resurrected in the third act?
Stay tuned for Part III: Everquest Financial, The Return of The Cioffi.
Thanks for the light you shed on Everquest last Spring which helped force the withdrawal of their rather horrendous bundle of CDOs from the Main Street market. I don’t know if you are continuing to follow this, but of you are I thought you might be interested in knowing that the Chairman of Everquest is now running for the United States Senate touting his executive management experience no less!! I have some additional details re: a couple of particularly outlandish direct quotes made about Everquest by the campaign that you could well find amusing (or depressing!!). Will be glad to share some of these new facts. Regards, Bob Allen