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Morgan Stanley Blows another $5.7 billion

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December 19, 2007 – Comments (2) | RELATED TICKERS: MS , C , BSC.DL

Wow. Only $5.7 billion worse than you thought a few weeks back, guys? Begging for moolah from the Chinese? Nice.

Oh, and watch the misdirect here. These are "equity units." Nice! Equity! That's cheap financing, right? Or wait...

Each Equity Unit is mandatorily convertible into Morgan Stanley shares at prices between a reference price and a threshold price at a premium of 20 percent to the reference price. The reference price will be determined the week of December 17, 2007. The Equity Units convert to Morgan Stanley common shares on August 17, 2010, subject to adjustment of the stock purchase date. Each Equity Unit will pay a fixed annual payment rate of 9 percent, payable quarterly.

Equity? Debt? What's the difference?

2 Comments – Post Your Own

#1) On December 19, 2007 at 11:08 AM, snookfisher (92.03) wrote:

This is just another debacle waiting to unfold in the future and we american investors will pay then as we have paid now. Foolishness never stops as long as greed takes and maintains it's hold.

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#2) On December 19, 2007 at 8:07 PM, DudeAbides (80.78) wrote:

Wow, how do I become a holder of those untis? 20% discount and 9% divi sounds pretty sweet to me.

Call me a noob to investing (and I kind of am), but why doesn't debt like this become available to plain old Americans? 

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