Analysis by David Ritter, September 17, 2008. MS Price $21.75 ARGUS RATING: HOLD ⢠MS: 3Q EPS tops consensus, but liquidity worries dominate ⢠Despite much better than expected earnings, Morgan Stanley shares plummeted on liquidity concerns and rumors that CEO John Mack would seek an acquirer. Still, we note that MS significantly increased liquidity and lowered its exposure to risky assets during the quarter. ⢠We are raising our 2008 EPS forecast from $4.00 to $4.65 following the third-quarter earnings surprise. We are maintaining our FY09 estimate of $5.00. ⢠With MS now trading at 60% of book value, we believe that the stock could offer an outstanding buying opportunity if market conditions settle. www.smithbarney.com
The merger "would make more sense if Morgan were seeking synergies rather than seeking safety," said Christopher Low, chief economist at FTN Financial in New York. Merrill Lynch analyst Guy Moszkowski in a note said the deal would do little to ease Morgan's challenges, because the depth of Wachovia's own credit risk is uncertain. The combination also would not deliver the reliable short-term funding it really needs, he said. "The merger wouldn't create new deposits, and most of the combined company would still need market-based funding," said Moszkowski, who declared the deal "unlikely" and a mismatch. http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSBNG8309220080828
I don't trade stocks, but made an exception for them, and just pulled $2 each out of a short on these guys. May they roast in hell. I'll smoke one and throw it on their fire.
Yeah , don't seek safety in a troubled market, just throw it into the wind! Imagine the thrill of going to zero! Come along!