[NEWS] Morgan Stanley — which is underwriting Uber’s IPO — is denying reports that it marketed a short-selling product to Lyft investors – Loganspace

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[NEWS] Morgan Stanley — which is underwriting Uber’s IPO — is denying reports that it marketed a short-selling product to Lyft investors – Loganspace


It’s getting naked-knuckled accessible but again in the fling-hailing wars.

According to a file earlier this day from The Info, newly public LyftthreatenedMorgan Stanley with staunch action earlier this week, nerve-racking in a letter that the principal investment monetary institution end marketing a transient-promoting product that it believed used to be disrupting trading in its inventory.

It says Lyft discovered referring to the product by intention of the Recent York Post, which reported in its accept as true with, separateaccount early this weekthat Morgan Stanley — the lead underwriter for Uber’s IPO — had been calling pre-IPO investors in Lyft’s offering and pitching them on one intention to lock in beneficial properties, no matter Lyft’s lockup agreements with those investors.

It all sounds fancy the soiled pool we’ve grown accustomed to seeing between the rival companies and their mates. But Morgan Stanley spokesman Designate Lake tells TechCrunch that the Recent York Post file used to be flat-out inappropriate, providing us with the following assertion: “Morgan Stanley did no longer market or originate, right away or now not right away, a sale, quick sale, hedge, swap, or switch of chance or value linked to Lyft’s inventory for any Lyft shareholder identified by the company or in another case known to us to be the matter of a Lyft lock-up settlement.

“Our firm’s activities personal been in the long-established direction of market making, and any suggestion that Morgan Stanley engaged so that you just can put together quick force to Lyft is unfaithful.”

What went inappropriate is laborious to grab, on condition that the Post shielded its sources. On the opposite hand it used to be highly descriptive in how it characterized the purported quick-promoting diagram. From its account:

Riding the queer bets is language in Lyft’s lock-up agreements that has hedge funds and various early Lyft investors giving themselves a inexperienced light to invent miniature “quick” bets, which invent money on a inventory’s decline. The diagram is to situation the bets in this kind of intention that investors don’t personal the relieve of a decline or a upward push in the inventory, nonetheless merely to lock of their IPO beneficial properties, which personal been valuable.

“If I’m able to lock in $70 now, I’m going to discover out that,” stated an investor.

“Lyft made a mistake,” one investor who bought into Lyft shares before the IPO suggested The Post. “Of us that accept as true with the inventory are allowed to hedge their positions. That you may well maybe well be no longer allowed to diminish your economic ardour.”

The investor used to be referring to a present email Lyft despatched to investors reminding them that they’re going to now not be allowed to pick out on in any transactions that would furthermore personal an affect on a holder’s “economic ardour ” in the inventory. This — and various “lock-up” language during the IPO — has Lyft investors defending towards a decline in an amount a much like their inventory holdings, rather then betting on the inventory’s decline.

We’ve reached out to Lyft for observation, which has but to answer.

A provide mindful of the matter confirms that Lyft’s ire with Morgan Stanley rests completely on that Post half, as renowned in The Info. We’re suggested that no additional action has been taken, past the letter despatched to the monetary institution by Lyft’s attorneys.

Whether the account ends right here remains to be seen. The Info has as much as this point its customary put up to consist of piece of Morgan Stanley’s assertion of denial, nonetheless it continues to file that, per one among its sources, Morgan Stanley had been calling early Lyft investors for weeks in the future of its roadshow and pitching them on a transient-promoting transaction that would enable them to lock in beneficial properties, no matter the lockup.

Assuming Morgan Stanley is telling the truth — and we are able to’t imagine the monetary institution would dash on the file in another case — there’s quiet the query of who floated misinformation a couple of transient-promoting product in the main command. It’d be one who regulators desire to dig into. Defend tuned.

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