Tags: "insightful", CNBC, FaceBook, hoodies, HOW DARE YOU, Jim Cramer, Morgan Stanley, no-brainers
Although the Morgan Stanley’s handling of the social media site’s disastrous stock offering is under scrutiny by just about every business news outlet under the sun, a Wall Street insider tells us the investment banking’s corporate communications warriors are blaming CNBC for engaging in some pre-IPO hyping of their own. CNBC senior vice president and editor in chief Nik Deogun “is under fire,” says the source. “Morgan Stanley is telling him, ‘How dare you criticize us when you guys promoted this IPO worse than anybody.’ ” The source recalls examples of CNBC’s on-air exuberance in the days leading up to the IPO, including treating Facebook CEO Mark Zuckerberg ’s entrance at the kick-off of the company’s investors road show at the Sheraton hotel in midtown as if it were “the President’s State of the Union Address” with multiple cameras and reporters. Then on May 17, the day before the actual IPO, the hosts of CNBC’s “Fast Money” appeared on camera wearing hoodies — a reference to Zuckerberg’s favorite fashion item, which came off like an homage to the baby billionaire. That same day, controversial “Mad Money” host Jim Cramer told his viewers, who tend to be mom-and-pop investors and market-playing college students, “If you can get in on the actual IPO, then I think Facebook is a no-brainer.” He added: “We all know this one’s going to pop like crazy on its first day of trading, so if you can get in on the deal, I think you should try to get your hands on as many shares as possible.”…CNBC spokesman Brian Steel said: “CNBC’s Facebook coverage has been widely acknowledged as fair, balanced and insightful.” [NYDN, related, related]
Tags: a promise is a promise, FaceBook, Mark Zuckerberg, Michael Grimes, Morgan Stanley
In snaring the most coveted investment-banking assignment of the year, Morgan Stanley’s Michael Grimes insisted to a senior Facebook executive that he be the “single driver” of the company’s initial public offering, adding that if the deal soured, it would be his “throat to choke. [WSJ]
Tags: focusing the crap out of cost-cutting, James Gorman, maniacal focus, Morgan Stanley
James Gorman is approaching cost-cutting with the same focus as the Zodiac killer, so maybe. Read more »
Tags: Goldman Sachs, Layoffs, Morgan Stanley, that's unfortunate, yay JPMorgan?
Supposedly summer cuts are under consideration at all firms. Read more »
Tags: Citi, JVs, M&A, Morgan Stanley, Morgan Stanley Smith Barney
Morgan Stanley has announced that it will be buying 14% of its Morgan Stanley Smith Barney joint venture from Citi in a sort of glacially negotiated way. MS currently owns 51% of MSSB (plus $5.5bn of preferred interests), and Citi owns the other 49% (plus $2bn of preferred). You can read how they’re going to figure out the price here. Basically they each hire an advisor to value MSSB like a public company, and then get together and see how close they are. If they’re within 10% of each other, they average their prices; if not, they hire a third advisor to figure out who got closer to the right answer. Don’t get too excited about pitching to be one of those advisors, though, at least not in the first round:
Morgan Stanley and Citigroup each will engage one investment bank or financial advisory firm of national standing and with experience in the valuation of securities of financial services companies (an “Appraiser”) for purposes of estimating FMV. All fees and disbursements of the first two Appraisers shall be the responsibility of the party that engaged such Appraiser. Either or both of the first two Appraisers may be an affiliate of the party engaging such Appraiser, and Morgan Stanley has engaged Morgan Stanley Investment Banking as its Appraiser.
MSSB’s net income was about $300mm last year*, and recent Morgan Stanley Investment Banking valuation precedents suggest about a 100x P/E, so I’ll go ahead and predict we’ll see a $30bn-ish valuation from them, no? (Too easy? Actually, ha, it’s not that wildly off; press reports suggest a $15bn bid from MS and a $23bn offer from Citi.) Here’s how they’ll do their math: Read more »