Morgan Stanley (NYSE: MS) has sold off enough! That is what the company CEO is saying, and he’s putting his money where is mouth is. A Form-4 SEC filing this morning shows that James Gorman spent more than $2 million dollars in open market transactions to purchase Morgan Stanley shares.
The purchase was 100,000 and this was put an average (VWAP) price of $20.6207 per Morgan Stanley share. The shares were purchased in multiple transactions at prices ranging from $20.555 to $20.73 and the date of the transaction is today’s date of August 4.
This takes his direct ownership to 854,393 shares, plus another 977 shares in a 401/K, plus another 100,000 listed as “By Grantor Retained Annuity Trust” in the filing.
Morgan Stanley shares are still down 3.4% at $20.30 this morning and the daily low is only $20.22. The 52-week range is close to being breached as well as the range is $20.18 to $31.04.
If you go to Morgan Stanley’s earnings release from July, book values were noted as follows: “At June 30, 2011, book value and tangible book value per common share were $30.17 and $26.61, respectively, based on 1.9 billion shares outstanding. Book value and tangible book value per common share were reduced by approximately $2.29 and $1.41, respectively, due to the increase in period end common shares outstanding resulting from the MUFG preferred stock conversion.”
Unfortunately, book value are a ceiling rather than a floor right now. With all of the debt downgrade woes and with the drop in the markets, the market thinks these book values are likely to fall rather than rise.
JON C. OGG