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

December 2, 2008 11:42:56 AM CST

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

Threads (
1
 of 2)

Tags

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


Loading...

Premium Articles from HighBeam

Find more articles like this

Today's Most Popular

Loading...

Other Business Stories

What is Newser?

2008 Codie Finalist

Face it: there's too much news. At Newser a team of editors and writers culls the most important stories from hundreds of U.S. and international sources and reduces them to a headline, picture, and two paragraphs. It's the Newser guarantee: we can take any report or column or video and pack what you need to know into 120 words or less. Newser's short-form aggregation, visual format, and unique information tools help you get more of the kind of news you want, in a quicker and more entertaining way. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »