What does Facebook IPO lead really mean for Morgan Stanley?

Let’s get this out of the way first: Facebook will, without a doubt, have the largest-ever debut for an Internet company. It’s going to blow Google out of the water. It’s going to make last year’s launches of Groupon, LinkedIn and Zynga seem like kids’ stuff. And it’s going to make a select group of people very, very rich.

Aside from all that, it also puts Morgan Stanley on very solid footing at the expense of its biggest rival, Goldman Sachs. Let’s phrase it this way: when it is but Feb. 2 and analysts are already declaring that Morgan Stanley will lead all financial institutions as the top underwriter of U.S. IPOs for the whole of 2012 (which would make the title Morgan Stanley’s for the third straight year), that is a big deal.

It’s not even all about the money (although some might beg to differ). Morgan Stanley and the other banks underwriting Facebook’s IPO (which so far include JPMorgan, Goldman, Bank of America Merrill Lynch, Barclays Capital, and Allen & Co.) will likely take a smaller cut – perhaps 1% or 1.5% – than the traditional 5% that goes to the underwriters. The sheer size of the IPO filing (to put it in perspective, if Facebook gets $5B, it will account for roughly 70% of all 2012 global IPO activity, per ThompsonReuters) will make up for the lower percentage, of course. Where Morgan Stanley really wins here is in its reputation, though.

Think about it – over the last 12+ months, Morgan Stanley has been awarded the lead in IPO filings by LinkedIn, Zynga, and now Facebook, giving the company an enviable position in the market for tech IPOs – one that, mind you, was thought to have been cornered by Goldman. And when Morgan Stanley wins, Westchester wins – lest we forget that the investment banker is among the most important tenants and employers in Westchester County.

The week ahead: Remembering 9/11; MBIA vs. BofA; Obama vs. Romney

Welcome back to the office after the long Labor Day weekend…

JOBS will be all the rage this week, as President Obama and Mitt Romney both unveil extensive plans for creating jobs and rescuing the economy. Also, Fed Chairman Bernanke will give a speech on Thursday (same day as Obama’s address).

DOOM AND GLOOM? While U.S. markets were closed for the holiday, international markets continued to slip – WSJ’s 4-column headline “Europe Signals Global Gloom” says it all.

WITH THE 9/11 ANNIVERSARY fast approaching, the media will undoubtedly feature round-the-clock coverage of where we stand at the ten-year anniversary. At Inside Track, we remind you to say a prayer this week for the families and friends of the victims and to keep it all in perspective – there are some things that are bigger than the news.

MBIA Inc., the Armonk-based bond insurance giant, will face off with BofA-owned Countrywide Home Loans in the NY State Supreme Court later this fall; later this week we’ll tell you how big the implications will be for the insurer and for the country’s largest bank in the wake of the subprime mortgage crisis. HINT: BofA execs have billions of reasons to be worried.

Community banks feeling the love


Earlier this month, I reported that in the year ending June 30, 2011, The Westchester Bank posted increases in deposits and assets of 29% and 30% respectively.

This morning, UBS announced that it would eliminate 3,500 positions – this coming a week after Bank of America announced thousands of cuts. Oh, and BofA shares are at their lowest levels since March 2009 as the country’s largest bank by assets continues to struggle with the aftermath of the mortgage crisis.

Sense a trend here?

Community banks are on the rise in Westchester, with the county boasting branches of a dozen such institutions. These are now the banks the small businesses are going to for loans. Many of the county’s small businesses are thirsting for capital, and this time around it will come down to the community banks and their collective ability to respond to that need.