Morgan Stanley (NYSE: MS) has sent a letter 17,200 brokers at its Morgan Stanley Smith Barney brokerage houses telling the brokers that the bank is reviewing customer orders for the IPO of Facebook Inc. (NYSE: FB) and that the bank will make a price adjustment if the customer paid too much for the stock. That comes from a report at StreetInsider.com.
An even more interesting analysis by Reuters blogger Felix Salmon, who explains how Morgan Stanley might actually have made a pile of money by propping up FB’s share price last Friday. Salmon argues that the greenshoe shares were the equivalent of a big short:
Chances are, no one outside the company will ever know for sure what Morgan Stanley’s P&L on the Facebook IPO ends up looking like. But it would make sense, if Morgan Stanley saw a lot of selling pressure on Friday, for the bank to keep [holding] onto at least a little bit of its short position into Monday morning. At which point it could make a tidy profit on that plunging share price.
Facebook’s IPO — the gift that keeps on giving.
Paul Ausick
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.