Morgan Stanley Will Weather Facebook Fallout: Analyst
NEW YORK (
) --
Morgan Stanley
(MS) - Get Morgan Stanley Report
is likely to remain a top two technology underwriter along with
Goldman Sachs
(GS) - Get Goldman Sachs Group, Inc. Report
, despite "blunders in the pricing process" of the
(FB) - Get Meta Platforms Inc. Class A Report
, initial public offering, according to a report published Friday from Bernstein Research analyst Brad Hintz
Morgan Stanley initially appeared to have scored a big win in being selected to lead the Facebook offering.
"In making their pitch to Facebook, Morgan Stanley bankers promoted their firm's ability to distribute Facebook stock through its retail brokerage distribution channel," Hintz notes in his report.
However, Facebook raised the price of the offering in the final days before its completion even as Morgan Stanley analysts were warning top investor clients of a revenue shortfall, according to
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Reuters
.
Morgan Stanley Finally Downgrades IPO Client After 65% Drop >>
Morgan Stanley "pulled defeat from the jaws of victory in a very public manner," according to Hintz's report. However, the analyst contends that "although the
Facebook underwriting certainly hurts the prestige per share of
Morgan Stanley, the actual impact on the firm will be modest."
According to Hintz, "history shows that
equity capital markets market shares are stable and
Morgan Stanley has a long history of retaining #1 or #2 rankings as a U.S. technology sector underwriter. Bernstein does not believe the fallout from the FB IPO will permanently damage the investment banking franchise of the company."
--
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.
