What is the main purpose of this 8-K filing?

The main purpose of this 8-K filing is to disclose a Tax Opinion from Davis Polk & Wardwell concerning a specific financial product: 5.10% Reverse Exchangeable Notes due May 18, 2007, which are linked to the common stock of Las Vegas Sands Corp.

What are Reverse Exchangeable Notes?

Reverse Exchangeable Notes are a type of structured financial product. They typically offer a high coupon payment (in this case, 5.10% for a short period, equivalent to 20.40% per annum) but the principal repayment at maturity is linked to the performance of an underlying asset, such as a stock. If the underlying stock price falls below a certain level, the investor may receive less than their principal amount back, in addition to the coupon payments.

What is the risk associated with these notes?

The primary risk for investors holding these notes is the potential for a loss of principal if the price of Las Vegas Sands Corp. common stock declines significantly by the maturity date (May 18, 2007). The high yield of 20.40% per annum reflects this elevated risk.

Why is a Tax Opinion included?

A Tax Opinion is included because these types of structured notes can have complex tax implications for investors. The opinion from a legal firm like Davis Polk & Wardwell provides guidance on the tax treatment of the interest payments and the potential return or loss of principal.

JPMORGAN CHASE & CO 8-K SEC Disclosure

Summary

This 8-K filing from JPMorgan Chase & Co. (JPM), dated February 16, 2007, primarily serves to disclose an exhibit related to a specific financial product. The key exhibit is a Tax Opinion from Davis Polk & Wardwell concerning 5.10% Reverse Exchangeable Notes due May 18, 2007. These notes are linked to the common stock of Las Vegas Sands Corp. and carry an equivalent annual yield of 20.40%. For investors, this filing indicates JPM's involvement in structured products, specifically notes with a leveraged yield tied to the performance of another company's stock. The inclusion of a tax opinion suggests these are complex financial instruments where tax implications are a significant consideration for purchasers. Investors should note the short-term nature of these notes (due May 2007) and the high yield, which typically implies a corresponding level of risk.

Key Highlights

1JPM filed an 8-K on February 16, 2007, reporting an event on February 14, 2007.
2The primary content of the filing is Exhibit 8.1, a Tax Opinion from Davis Polk & Wardwell.
3The Tax Opinion relates to specific financial notes: 5.10% Reverse Exchangeable Notes due May 18, 2007.
4These notes are linked to the common stock of Las Vegas Sands Corp.
5The notes offer a high equivalent annual yield of 20.40%.
6The filing incorporates this exhibit by reference into JPM's existing Form S-3ASR Registration Statement.

JPMORGAN CHASE & CO 8-K Report, Exhibit Filing (Feb 16, 2007)

Summary

Key Highlights

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