After the close news:
Morgan Stanley Can’t Get Enough of Zynga
By Shira Ovide
Wall Street Journal
January 6, 2012, 5:58 PM
It’s possible Morgan Stanley investment clients have lost twice on Zynga’s IPO.
First, as our colleagues have reported, Morgan Stanley mutual funds in February bought stock in the online-game company while it was still a private company. That investment round came at a valuation for Zynga of about $14 a share, which means the investors in those Morgan Stanley funds now are down about $28 million, as shares of Zynga closed trading Friday at $8.81 apiece.
But the Morgan Stanley funds didn’t stop there.
According to a new regulatory filing, Morgan Stanley funds now own about 16 million shares of Zynga, or 16% of the company’s total publicly available stock. The regulatory disclosure doesn’t say when Morgan Stanley bought the Zynga shares, nor what price it paid for the stock.
But if Morgan Stanley acquired the additional Zynga stock in the company’s IPO, the extra batch of 10 million shares is again underwater, to the tune of nearly $13 million.
Remember that Morgan Stanley also handled Zynga’s IPO last month, the latest in a string of high-profile tech IPOs led by Morgan Stanley bankers. Morgan Stanley and its investment-banking peers (think Goldman Sachs and Facebook) have frequently plowed money from their investment funds into private companies. And those investments then can serve as footholds to land duties handling the companies’ initial public offerings.
The investment banks say their asset-management arms make decisions autonomously and aren’t influenced by driving business to their IPO-underwriting colleagues.
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