Brad Hintz Has An Idea For Morgan Stanley

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Morgan Stanley could shut down its trading businesses and the firm would be worth 40 percent more than yesterday’s share price, according to Brad Hintz, a Sanford C. Bernstein & Co. analyst...“We have long argued that absent a liquidity crisis, the mark-to-market balance sheets of Wall Street trading firms support a trough valuation at tangible book value,” Hintz wrote. “This is because at low valuations, an acquirer could simply liquidate the trading balance sheet, pay off the liabilities and walk away with more cash than they paid for the company. Thus, at certain P/TB levels, such as today, a broker is worth more dead than alive.” Hintz said he isn’t endorsing a dismantling of the trading operations. [Bloomberg]

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