Bear Stearns: More Reasons Why Investors Are Nervous

Charlie Gasparino

Investors are still jittery about the future of Bear Stearns.

First, the investment bank's agreement this week to swap stakes with Citic, the Chinese bank, isnt large enough for many investors who wanted a much bigger infusion of cash that could have led to a stock buyback. Illustration

In addition, people are worried about a possible fourth quarter writedown of risky securities on Bear's books, as well as a possible regulatory settlement stemming from the implosion of two sub-prime hedge funds over the summer.

Then there are continued questions about CEO Jimmy Cayne's future. Investors believe Cayne's management team is among the weakest on Wall Street, and there is increased speculation that Cayne might step down sometime next year.

As previously reported, Cayne was recently hospitalized with a urinary track infection. But CNBC has learned that Cayne suffered from a more serious ailment: an infection of his prostate just after he returned from China where he met with officials from CITIC.

Cayne is now back at work in good health and good spirits, say people close to the matter, and he has recently denied speculation that he is stepping down. But people who know Cayne are also questioning his future as CEO. Bear did not respond to repeated requests for comment on Cayne's health.