Morgan Stanley’s long -standing relationship with Tesla CEO, Elon Musk, bears fruit.
Friday, the investment bank posted a net profit of $ 4.3 billion in the first quarter, up 26% compared to last year, exceeding analysts’ forecasts. The $ 17.7 billion in the bank’s quarterly quarterly revenue was increased by an increase of 45% of its negotiation activity on stocks, whose revenues increased to $ 4.1 billion in the midst of increased volatility of the market.
The bank has also seen a leap in the “other” income in its group of institutional securities. This line includes the bank loans book of the bank, which benefited from the sale of loans that the bank raised in 2022 to help Musk buy the social media platform now called X, according to a person knowing the finances of the company.
Morgan Stanley led a group of seven banks to raise $ 13 billion in debt for the 2022 acquisition.
Bloomberg reported for the first time that the Boost in the “Other” category was linked to the sale of X loans.
Genuations 1Q from Morgan Stanley Screenshot
Morgan Stanley has long been a banker at Musk. The star banker of the firm, Michael Grimes, recently left Morgan Stanley after 30 years for a role with the trade department, led by Howard Lungick, who is also from Wall Street.
Grimes played an important role in helping Tesla CEO to buy X, then called Twitter in 2022. The agreement ended up costing Morgan Stanley and the other loan banks for billions of supposedly, or debt that banks have trouble unloading investors.
Morgan Stanley and other banks began to sell the debt this year in the middle of an enlightened financial image for X, according to a person knowing sales.
Friday, the CEO of Morgan Stanley, Ted Pick, said that he was “prudently optimistic” about the state of the economy, a contrast hit with the comments formulated earlier by the CEO of JPMorgan, Jamie Dimon.
“We have not seen a slowdown,” said Pick, referring to market activity since the beginning of April. “Is it more bumpy for some customers? Of course, this is the case,” he said, adding, “but we are always, we will call it, prudently optimistic that we will not go in recession, and we will continue.”
businessinsider
