M.Stanley under pressure on MUFG concerns, outlook
Pressure built on Morgan Stanley on Friday, with investors unconvinced about its deal with Mitsubishi UFJ and two analyst reports citing concerns about the bank’s earnings outlook.
The reports, one by brokerage Ladenburg Thalman, the other by ratings agency Moody’s, come at an extremely delicate time for the bank, with its stock falling 26 percent on Thursday and getting close to single digits.
Mitsubishi UFJ Financial Group, Japan’s largest bank, said it has no plans to pull out of a planned $9 billion investment in Morgan Stanley
Mitsubishi UFJ has said it expects the deal to take a 21 percent stake in Morgan Stanley will close by next week, but that has failed to calm investors.
Shares of Morgan Stanley have lost nearly half their value in the last three days, on concern Mitsubishi UFJ may back out of injecting the much-needed capital faxless payday loan online.
“We have seen this movie before,” Richard Bove, Ladenburg Thalman’s veteran Wall Street analyst said on Friday after cutting Morgan Stanley’s price target. “One must hold one’s breath at the moment and hope that this is a different movie.
Bove said the pressures on the company is “enormous” and that one of the concerns is that Morgan is believed to be counterparty to “numbers” of Lehman Brothers transactions. Lehman Brothers filed for bankruptcy last month.
Separately, Moody’s on Friday warned it might cut the long-term debt ratings of Morgan Stanley and Goldman Sachs, which would increase their cost of borrowing.