Rabble Babble: Morgan Stanley stock free falls on rumors

Shares of Morgan Stanley tumbled 26% Friday morning despite the company's repeated claims that the bank has enough capital to function and that it will close a $9 billion investment from Japan's Mitsubishi UFJ Financial Group on Tuesday. Morgan Stanley stock lost nearly half its value, hitting a 10-year low over the last three days.

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Media reports say investors are nervous Morgan Stanley's investment by Mitsubishi won't be enough, after American International Group Inc.'s need for an extra $37.8 billion capital Thursday. However, Friday morning, Ladenburg Thalmann & Co. analyst Richard Bove said Morgan Stanley's exposure to Lehman Brothers Holdings Inc. bankruptcy is minimal, and not the "several billion" he had thought to be the case, according to MarketWatch.

Here's the Rabble babble on the message boards.

• A high percentage of the shares are staying right where they are at. There are cracks in the wall but the foundation is still intact. The 9 billion coming from mitsubishi is key. If that comes in this thing is saved. If it doesn't it will get really nasty.

• Since they will be downgraded, the question is not if the company will the be nationalized, sold for a penny on the dollar or go bankrupt. The question is WHEN will it happen. Write it down in your calander.

• with LEH experience, i want to share a thought. be cautious about MS before you jump in in these 8-9$s value. Unless news improve over the weekend, I don't bet my money on MS..may be ambitious people can look at GS or any other banks who are beaten down..

• their exposure to LEH is instead of not supplying any specific number? Wouldn't that put the fears to rest better than just denials?

• Made a killing on AIG and WB when they were oversold and got out with incredible gains. MS will follow exact pattern, killings to be made from this panicing, and all in just a few days.

The siege on Morgan Stanley also has many wondering if the bank is one that the government could invest its $700 billion in. - Maria Woehr

Also see:

Rabble Babble: Short selling ban ends, and Morgan Stanley tanks

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