Rochester,NY 7/11/2009 3:12:08 AM
Afternoon Stock Report - MS - Panel: Banks underpaying gov't to exit bailout - Sourced WhisperFromWallStreet.com
Morgan Stanley
Afternoon Stock Report - MS - Panel: Banks underpaying gov't to exit bailout - Sourced WhisperFromWallStreet.com
Morgan Stanley, MS
The Treasury Department is selling its financial stakes in bailed-out banks for one-third less than they're worth, potentially shorting taxpayers up to $2.7 billion, a bipartisan congressional watchdog says.
The estimated shortfall concerns warrants, financial instruments that allow Treasury to buy shares of the firms at a set price in 10 years. If the stock prices of the banks go up, as they are expected to do, taxpayers could reap a healthy profit.
Treasury obtained the warrants when it began injecting billions into the nation's largest financial institutions in October. They were considered a "deal-sweetener" -- a way to help taxpayers benefit from the upside of a financial recovery that depended on billions of federal dollars.
Many large banks received permission to exit the program far earlier than was initially expected. Last month, Treasury announced that 10 of the nation's largest banks -- including JPMorgan Chase & Co., Goldman Sachs and Morgan Stanley -- could repay about $68 billion of bailout money.
Last Trade: 26.04
Day's Range: 25.34 - 26.15
52wk Range: 6.71 - 46.58
Volume: 14,340,398
ABOUT - Morgan Stanley
Morgan Stanley, through its subsidiaries and affiliates, provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide. The company operates in three segments: Institutional Securities, Global Wealth Management Group, and Asset Management. The Institutional Securities segment engages in various activities, including capital raising; provision of financial advisory services principally on mergers and acquisitions, divestitures, corporate defense strategies, joint ventures, privatizations, recapitalizations, spin-offs, corporate restructurings, shareholder relations, tender offers, exchange offers, and leveraged buyouts; corporate lending; sales, trading, financing, and market-making activities in equity and fixed income securities and related products comprising foreign exchange and commodities; benchmark indices and risk management analytics; and investment.
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