Skip to: Content
Skip to: Site Navigation
Skip to: Search

July 25, 2008 9:42:33 PM CDT

Learn about Newser Points »

« Back to the grid | Next story »

Morgan Stanley Stuns With $9.4B in Writedowns

Posted Dec 19, 07 8:10 AM CST in Business 

(Newser) – Morgan Stanley, the nation's second-largest investment bank, lost $3.59 billion this quarter, its first loss ever, after taking a whopping $9.4 billion in writedowns on mortgage-backed securities. CEO John Mack, who promised to give up his 2007 bonus as penance for the losses, also announced a $5-billion cash infusion from China Investment Corp., the investment arm of the Chinese government, for a stake of 9.9% of the company.

The writedown knocked Morgan Stanley revenues to negative $450 million—analysts had expected a positive $4.23 billion. “This quarter is deeply disappointing,” said Mack, promising to right the ship and calling the writedowns “isolated losses by a small trading team.” But not everyone was persuaded: “It’s going to get worse before it gets better,” said one investor.

Sources Wall Street Journal, Bloomberg

0 comments | Print E-mail | Digg Seed this on Newsvine Add this link to Del.icio.us StumbleUpon

Related Newser Stories

  • Morgan Stanley CEO Feels Heat

    Dec 20, 07 11:37 AM CST
    Morgan Stanley CEO Feels Heat When John Mack became Morgan Stanley’s CEO in 2005, he told the company to take more risks. “You’ve lost your swagger,” he told his traders. Now, after several questionable moves and yesterday's staggering $9.4 billion writedown, swagger isn’t looking so hot—and Mack could be sent packing, the Wall Street Journal reports. More »

  • Bear Stearns Posts First Loss

    Dec 20, 07 9:19 AM CST
    Bear Stearns Posts First Loss Analysts expected Bear Stearns to post its first-ever loss today, they just expected it to be smaller. After $1.9 billion in subprime writedowns, the company posted a $6.91 loss per share, dwarfing the $1.82 analysts predicted. Executives gave up their bonuses, as revenue from debt sales and trading were wiped out, Bloomberg reports. “They’ve got a myriad of problems,” one analyst said. More »

  • Morgan Stanley 2nd Quarter Wallops Rivals

    Jun 20, 07 10:23 AM CDT
    Morgan Stanley 2nd Quarter Wallops Rivals Morgan Stanley released far better-than-expected earnings figures today, with net income up over 40% in the last quarter. Riding strong fixed-income sales and trading figures, profits rose to $2.58 billion, up from $1.84 billion last year. That's a far cry from rivals Goldman Sachs and Bear Stearns, whose second-quarter bottom lines were hit hard by the collapse of the subprime mortgage market. More »

The Morgan Stanley building is shown in this June 19, 2007 file photo in New York. (AP Photo/Mark Lennihan, file)   (Associated Press)
John Mack, CEO of Morgan Stanley, attends the Committee of 100 Conference in this file photo from April 20, 2007 in New York. Mack said he would give up his 2007 bonus because of the firm's dismal fourth...   (Associated Press)
A sign on Morgan Stanley's headquarters is shown Monday, April 16, 2007 in New York. (AP Photo/Mark Lennihan)   (Associated Press)
« Prev« Prev | Next »Next » Slideshow
Our editors also recommend:

Threads (1 of 2)

Tags

subprime mortgages  • mortgage backed securities  • earnings reports  • Morgan Stanley  • writedowns  • John Mack


Loading...

Loading...

Today's Most Popular


Other Business Stories

What is Newser?

2008 Codie Finalist

Newser gives you more news in less time. We search for the best and most important stories all over the web, read them for you, and deliver concise and sharp summaries—along with links to the full text. Newser provides a way to stay on top of an ever-expanding horizon of news and opinion—politics, sports, business, trends, technology, personalities, crimes, and controversies. Newser keeps you not just better informed, but, with our signature graphic interface and smart condensed format, more enjoyably informed.

Learn more »