Morgan Stanley Boss Urges Wealth Clients to be Patient About Uber IPO
The CEO of Morgan Stanley, which was the lead underwriter on this month’s initial public offering of Uber, is urging investors to stay patient with the ride-hailing tech firm’s stock price as it continues trading well below its pre-IPO price, according to news reports.
"You should buy into IPOs to hold them, because you believe in the company," James Gorman told reporters after the firm’s annual shareholders meeting Thursday, according to Bloomberg. "I’m not going to predict the future of the stock, but yeah, Uber’s a great company."
As encouragement, Gorman pointed to the 2012 Facebook IPO, which traded well below its offering price for months following its 2012 listing, according to Bloomberg. At the time, Gorman said that it would return to the $38 offering price within a year, the news service writes.
"I went on TV and said within a year it will be back to flat,” he said Thursday, according to Bloomberg. “And it took a little longer, it took about 15 months, and now it’s $180-something.”
Morgan Stanley reportedly earned $41 million in investment banking fees on the IPO. But the firm also allowed its affluent wealth management clients and some employees, including some financial advisors, to invest in Uber at the pre-IPO price of $48.77, Bloomberg reported earlier this month.
The stock closed down again on Friday, but has traded as low as $36.08 since going public on May 10. Some industry experts have called the offer to advisors and clients a conflict of interest, as reported.