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Rating:Morgan Stanley Friended CapGroup and Fido in FB IPO Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, May 24, 2012

Morgan Stanley Friended CapGroup and Fido in FB IPO

News summary by MFWire's editors

The WSJ put five reporters (and three with bylines) on the case of just which institutional investors got the skinny on Facebook's revenue recasting from Morgan Stanley. The reporters write that the underwriter gave the tip to just a few investors during the roadshow and on the QT.

It turns out that major mutual fund shops were among those getting the early word. Those shops included Capital Research & Management [profile] and Fidelity Investments [profile].

Capital Research traders paired the information learned from Morgan Stanley during a May 11 stop of the Facebook roadshow with information they gleaned directly to trim the number of shares they purchased for their funds to zero, according to the WSJ article.

That would seem to be good news for American Funds shareholders. The article, however, puts a more nefarious tone around last week's events.

The reporters also discovered that Fidelity Investments was "among the big clients" for the IPO (not really a surprise). Fidelity analysts were also frustrated by the offering price for Facebook shares in light of the dimmed earnings guidance discovered during the roadshow.

Fidelity reps did not talk to the paper.

Fidelity was also involved with the IPO as a brokerage firm and the article does not make clear which part of Fidelity -- the mutual fund arm or the brokerage arm -- is being discussed. 

Edited by: Sean Hanna, Editor in Chief


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