Sometimes JPMorgan Gets Paid for Advising on Mergers


By Matt Levine – Investment banking, as a business, consists of doing tons of free work — tons of terrible, free work3 — for lots of clients in the hope of getting a few big merger or IPO mandates.

Some clients cheerfully milk this without ever paying off. For JPMorgan, Forest Labs and Comcast paid off. With windfalls! Or with, you know, the fees that JPMorgan earned by working for them for years and then advising on and financing their mergers, whatever.

There’s a lot of this sort of thing in the financial industry: You work or pay to obtain a bunch of out-of-the-money call options, and then you hope that some of them pay off.4 more> http://tinyurl.com/kmw3ru6

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