NEW YORK — Bear Stearns Cos. started this week with sufficient access to cash, but persistent rumors rattled lenders, clients and counterparties, prompting a run on the bank, chief executive Alan Schwartz said Friday.
"A lot of people wanted to get cash out," he said on a conference call with analysts and investors. "A lot of people wanted to act to protect themselves in case the rumors turned out to be true."
Bear is now working with bankers at Lazard Ltd. to consider its alternatives, which could include a sale of the bank. In the meantime, Bear is sheltering under an agreement with JPMorgan Chase & Co., which as announced earlier Friday is working with the New York Fed to provide Bear with financing to cover its normal needs for a month.
Customers haven't significantly ramped up their demands on Bear's cash since Friday morning's announcement, the company said. Customers of Bear's prime brokerage business - which serves hedge funds - were pulling out cash early this week and accelerated those withdrawals through the week, the company said.
The company's shares recently were down 40% at $34.20.
Bear reports earnings Monday. The bank said it's comfortable with the current range of estimates by Wall Street analysts and added it hasn't had big write-downs of assets since Feb. 29.
