Morgan Stanley is having a rough year and an even tougher couple of weeks. Forbes writes that as shares of the investment bank sank nearly 8% on the first trading day of the fourth quarter CEO James Gorman sent a memo to employees citing an “an enormous amount of confusion and misinformation” about the bank’s financials.
Reuters picked up the memo from Gorman which reads: “In fragile markets, where fear triumphs over common sense, these things are bound to happen,” Gorman wrote. “It is easy to respond to the rumor of the day, but that is not usually productive.”
What Gorman seems to be referring to are alleged rumors that Morgan’s exposure to troubled European banks with exposure to that continent’s sovereign debt. Information about Morgan’s true exposure to troubled Euro-zone banks is somewhat blurry but the bank’s share price has been even more vulnerable since September 22 when financial blog ZeroHedge said that Morgan Stanley’s entire European bank exposure is 3 times its market cap, and well over its entire book equity value, and that it’s exposure to french banks is 60% greater than its market cap.
Year to date Morgan shares are down 54% and 22% over the last month...
Find out more at http://www.forbes.com/sites/halahtouryalai/2011/10/04/morgan-stanleys-looming-crisis-of-confidence/
No comments:
Post a Comment