Morgan Stanley Makes Big Bet on LinkedIn

By Shira Ovide

Morgan Stanley, which led the IPO of LinkedIn, must really, really believe in the company. The Wall Street firm and investment funds it manages hoovered up about one-quarter of the social-networking company’s publicly available stock.


In a regulatory filing, Morgan Stanley and its asset-management arm reported owning nearly 23% of class A shares in LinkedIn.


UPDATE: A person familiar with the matter said the vast majority of the Morgan Stanley LinkedIn stock was purchased in the open market, rather than as part of the IPO.


That means that clients in Morgan Stanley funds are likely underwater on the LinkedIn investment so far. As Deal Journal previously noted, LinkedIn shares are trading at their lowest point since the company’s much heralded stock debut. That means on their financial statements. (However, Morgan Stanley and other investors who were allocated stock in the IPO did very well. The company went public at $45 a share.)


Morgan Stanley and its funds hold nearly 2 million shares, or $148 million worth of LinkedIn stock with a price of $73.93 a share. The holdings may represent nearly one-quarter of LinkedIn’s publicly available stock, but the stock holdings are a dinky percentage of about 2% or so of the company overall.


Only a small percentage of LinkedIn’s stock was offered to the public in the IPO, and the small float may have contributed to the volatility in LinkedIn stock. Presumably, the Morgan Stanley funds bought and have held onto their LinkedIn shares, which means there is an even smaller float that is being traded furiously in LinkedIn.