Morgan Stanley (NYSE:MS) has announced the terms for its new 6.625% Non-Cumulative Preferred Stock, Series Q, following a recent filing with the Securities and Exchange Commission. The financial giant filed the Certificate of Designation on Monday, establishing the rights and preferences for the newly issued stock.
The Series Q Preferred Stock, with a par value of $0.01 per share and a liquidation preference of $25,000 per share, will affect dividend payments and other financial transactions involving Morgan Stanley's junior stock, which includes the company's common stock. Specifically, if Morgan Stanley does not declare and pay full dividends on the Series Q Preferred Stock, there will be restrictions on its ability to declare or pay dividends, or to purchase, redeem, or acquire shares of its junior stock.
The Certificate of Designation for the Series Q Preferred Stock is part of a broader strategy to raise capital and potentially strengthen the firm's balance sheet. The document detailing the terms of the Series Q Preferred Stock was filed with the Secretary of State of the State of Delaware on July 29, 2024, and is included as part of the exhibits in the 8-K filing.
Morgan Stanley, headquartered at 1585 Broadway, New York, is a leading global financial services firm providing a wide range of investment banking, securities, wealth management, and investment management services. The company's common stock is listed on the New York Stock Exchange under the symbol MS. The announcement of the Series Q Preferred Stock is a significant event for the company and its investors, detailing the specific rights, preferences, and limitations that will govern these securities.
In other recent news, Morgan Stanley Expansion Capital made a strategic investment in UK fintech Sokin, aiming to bolster Sokin's global expansion and product development. The consortium of investors includes notable figures like Gary Marino, former Chief Commercial Officer at PayPal (NASDAQ:PYPL), and Mark Britto, former Chief Product Officer at PayPal. The financial terms of the investment were undisclosed.
Morgan Stanley's Q2 earnings showed a significant increase, driven by a 51% surge in investment banking revenues. The adjusted earnings per share (EPS) for the quarter was reported at $1.88, surpassing consensus estimates. However, the wealth management segment underperformed, with revenues falling 1% compared to consensus estimates.
Price targets for Morgan Stanley were adjusted by several firms following the strong Q2 performance. BofA Securities raised its price target to $120, while Evercore ISI increased its to $115. Additionally, Morgan Stanley predicts a surplus in the crude oil market next year, with Brent crude prices expected to drop to the mid-to-high $70 range.
The bank also reported a decrease in investments in U.S. software stocks by global hedge funds, signaling a broader sell-off in the technology sector. In other developments, the bank is part of the advisory team for Hyundai Motor (OTC:HYMTF)'s upcoming initial public offering (IPO) in India, projected to earn up to $40 million in fees. These are the recent developments for Morgan Stanley.
InvestingPro Insights
Morgan Stanley's (NYSE:MS) recent move to issue Series Q Preferred Stock is part of its capital strategy, and a glance at the firm's financial health through InvestingPro data presents a robust picture. With a market capitalization of $167.83 billion and a strong revenue growth of 5.5% in the last twelve months as of Q2 2024, the company stands as a prominent player in the Capital Markets industry. The firm's dedication to shareholder returns is evident, as it has not only maintained dividend payments for 32 consecutive years but also boasts a significant dividend growth of 19.35% in the same period.
Two InvestingPro Tips that investors may find particularly relevant are that Morgan Stanley has raised its dividend for 10 consecutive years, signaling a commitment to returning value to shareholders, and that analysts predict the company will be profitable this year, which is consistent with the firm's positive performance metrics. These insights suggest that Morgan Stanley's financial maneuvers, including the issuance of preferred stock, are backed by solid fundamentals and a track record of profitability.
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