Morgan Stanley (MS) CEO Gorman Goes to Battle With ZeroHedge, Calls Dick Bove

September 23, 2011 2:22 PM EDT
Infuriated by rumors sparked by a ZeroHedge report about its exposure to European banks, Morgan Stanley's (NYSE: MS) CEO James Gorman took the "unusual step yesterday of calling analysts to quash an ugly rumor" and "ordered his traders to buy the firm's own debt in the market to underscore the firm’s financial strength." This according to FOX Business Network (FBN) Senior Correspondent Charlie Gasparino.

According to Gasparino:
"Gorman started to scramble, making [Dick] Bove one of his first calls. The CEO told Bove that Morgan's 'net exposure' to French banks was 'zero.' Gorman also said that while there may be a 'run on the stock,' there is no ‘run on the bank’ at Morgan Stanley, as there was in 2008, with large investors yanking money out of the firm’s prime brokerage accounts because they were afraid it might not survive. He confirmed that the firm was in the market buying its own debt to show skittish investors that it had enough cash and liquidity to survive not just the European banking crisis, but the rumors of its own pending demise, which began with a blog posting. ‘I called up Bove and said, 'You’re a smart guy, here are the facts,' Gorman told the FOX Business Network. Gorman did the same with Merrill Lynch analyst Guy Moszkowski, and the result was two positive analyst reports and Morgan's shares rebounding today."

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Charles Gasparino, Morgan Stanley, Merrill Lynch, Richard Bove, Guy Moszkowski


Morgan Stanley
bankster on 2011-09-25 17:46:07
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Why did Gorman feel the need to call analysts if the rumors aren't true? Just ignore them. Good leaders don't get distracted by small stuff. otherwise, people might ask why the credit default swaps are now higher than ANY OTHER BANK AT 435, Bank of America? Or, better, if the firm has 0 exposure to France, then why was MS meeting with French banks for assurances that they are sound? That's like asking an alcoholic if he's drinking. In short, I am sure the CEO has better things to do, and if he doesn't, then sell the firm to someone who can make it work.

Typical inane reporting
NeverEnuf on 2011-09-24 22:23:18
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You know what else went up 5% Friday? Bank of America, Citigroup, Deutsche Bank, UBS in the wake of that $2bln loss, Credit Agricole, Royal Bank of Scotland, Barclays, Credit Suisse is up 3%, AIG is up 3%.

It's called a consolidation—things go down for a long time, and shorts are bound to take some profits along the way. Just like when things go up, longs are bound to take some profits. LOL

It would be useful if any of the financial reporters had ever traded a stock before in their lives. Kids trading penny stocks on their laptops have a clearer understanding. :)

that wouldn't be necessary -
bluenextbear on 2011-09-23 14:26:42
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... if the quarterly reporting was a bit less opaque - si? no?

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