Tarp Warrants: How Much to Bid?

7 Pages Posted: 30 May 2017

See all articles by Robert M. Conroy

Robert M. Conroy

University of Virginia - Darden School of Business

Huan Tran

University of Virginia - Darden School of Business

Abstract

In 2009, Tim Laramy, a portfolio manager, was trying to decide what amount, if any, to bid for TARP warrants soon to be up for auction by the U.S. Treasury. This case discusses the 2008 Wall Street bailout, the Capital Purchase Program, and the histories of three major banks. It has been used in a first-year MBA program.

Excerpt

UVA-F-1642

Rev. Feb. 16, 2016

TARP Warrants: How Much to Bid?

For once we'd like to get a fair value when we come into contact with the banking system. We don't want a ruthless bargain.

—U.S. Congressman Brad Miller (D-NC), May 22, 2009

In the wake of the 2008 financial crisis, Laramy Capital Management had managed to rebound nicely. Scooping up beaten-down financial stocks that had become out of favor following the broad market meltdown, portfolio manager Tim Laramy recouped a healthy share of his fund's 30% loss from 2008.

. . .

Keywords: 2008 financial crisis, Wall Street bailout, TARP warrants, JP Morgan, Capital One, TCF Financial, Capital Purchase Program

Suggested Citation

Conroy, Robert M. and Tran, Huan, Tarp Warrants: How Much to Bid?. Darden Case No. UVA-F-1642, Available at SSRN: https://ssrn.com/abstract=2974468 or http://dx.doi.org/10.2139/ssrn.2974468

Robert M. Conroy (Contact Author)

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Huan Tran

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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