NEW YORK ( TheStreet) -- Green Dot Corp. (GE), which has seen its shares fall 65% since Jan. 28 2011 and 50% since it went public in July 2010, finally earned a downgrade from Morgan Stanley, which had been recommending the stock since Sept. 2010.
Morgan Stanley, which along with JPMorgan Chase (GE), was lead underwriter on Green Dot's initial public offering in July 2010, lowered its recommendation to "equal weight" from "overweight," citing the likelihood of increased regulatory scrutiny of pre-paid debt card providers such as Green Dot, as well as competition from Western Union (WU). Morgan Stanley also slashed its price target by nearly 60%--to $25 from $60. JPMorgan continues to recommend Green Dot shares, as it has done since the company's IPO.
|Green Dot shares are down 50% since its 2010 IPO but its top two underwriters were recommending the stock until Morgan Stanley downgraded it today.|
Morgan Stanley is facing regulatory scrutiny over whether it tipped off favored clients to weakening results at Facebook (FB), ahead of the social network's initial public offering last week. Morgan Stanley was also a lead underwriter on that offering.
Glenn Fodor, the lead analyst on Green Dot for Morgan Stanley, and JPMorgan counterpart Tien-tsin Huang, referred questions to their public relations offices, which had no immediate comment.-- Written by Dan Freed in New York. Follow this writer on Twitter.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV