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) --

Green Dot Corp.

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, 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

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, 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

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. 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.

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facing regulatory scrutiny

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, 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


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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.