The bank’s fumbled initial public offering of Facebook Inc. (NASDAQ:FB) has led to investor anger, criticism, lawsuits, and even an investigation into allegations that the bank cut its forecasts on Facebook’s revenues and earnings but only told select clients.
Still, Silicon Valley is giving the bank the benefit of the doubt, taking into account the unusually large size of the IPO and Nasdaq OMX Group Inc.’s (NASDAQ:NDAQ) problems during the start of trading as potential reasons for the offering going awry. Those who defend Morgan Stanley also note that with an IPO in a relatively untested sector, another bank could have faced similar problems.
Morgan Stanley’s reputation for selectivity when choosing issuers makes it a trusted source for large institutional investors, and thus a valuable ally for technology issuers looking to raise capital. According to data from Reuters, Morgan Stanley was the number one lead banker for technology IPOs last year, leading 16 out of 37, and has so far retained that spot this year.
Investing Insights: How Many Millions Did Citadel Lose on Facebook?