The Incredible Irony Of Morgan Stanley's Facebook Post-Mortem

Tyler Durden's picture

Just after the market close on what will probably go down as the worst day in history for every stock-broker-come-private-wealth-commission-taker's wealth-manager's future business (that would be the Facebook IPO - or as some call it "Blue-Friday"), the head of Morgan Stanley's 'Consulting Services Group' sent what is likely the worst timed, worded, and ironic self-congratulatory email of all time. James Walker, the MD of the group (correction - Andy Saperstein - who later blamed the NASDAQ for all his woes)- which manages $385 billion of client assets and is the nation's largest managed accounts business - was not wrong in his summation that this IPO was "orderly, fair, and well-communicated" and "will have a long-lasting impact on our clients and the organization". We assume he didn't mean "finish it" as one can only imagine the breadth of these clients who ended up stuffed full of the worst large IPO of the decade.




and in case you didn't know who James Walker and his new role in Consulting Services...

Morgan Stanley Smith Barney Names James F. Walker Head of Consulting Services Group


NEW YORK--(BUSINESS WIRE)--Morgan Stanley Smith Barney today announced the appointment of Managing Director James F. Walker to head the Consulting Services Group, the industry-leading provider of investment consulting and managed account services.


Mr. Walker, 47, succeeds James J. Tracy, who was named in July as Chief Operating Officer of Distribution and Development for Wealth Management in the U.S., Morgan Stanley Smith Barney. Mr. Walker will continue to report to Paul Hatch, Head of the Investment Strategy and Solutions Group.


“Jim Walker’s extensive industry experience, deep knowledge of Consulting Services and close rapport with Financial Advisors and clients make a great leadership combination. I look forward to working with him as we drive investment excellence and build on the historic leadership of our Consulting Services Group,” said Mr. Hatch.


With over $385 billion in client assets, the Consulting Services Group is the U.S. wealth management industry’s managed accounts leader, with a market share of nearly 21%. It also leads in several of the fastest growing managed account categories, including rep as portfolio manager (35.3% market share) and unified managed accounts (33.8% market share). (Source: Cerulli Associates 2Q 2010 Summary, August, 2010).


Mr. Walker most recently served at Morgan Stanley Smith Barney as Chief Operating Officer of Investment Strategy and Solutions, with responsibility for strategy, coordination and overall business leadership. Prior to this position, he was Director of Finance, Risk and Strategy for Citi Global Wealth Management Investments, having joined Citi in 2006 as COO of Investment Advisory Services.


Earlier, Mr. Walker held a succession of leadership positions over 20 years with Merrill Lynch’s Global Wealth Management Group, including Chief Administrative Officer for the Global Private Client business, complex manager positions in Wellesley, MA and Norfolk, VA, and Midwest regional sales manager. He began his career in 1985 as a Financial Advisor in Washington, D.C. and Northern Virginia.


He received his B.A. in economics from Catholic University of America, and attended the Massachusetts Institute of Technology as a Sloan Fellow, where he received a S.M. in management science and continues as a lecturer. He is a Certified Investment Management Analyst and member of the Investment Management Consultants Association.

Correction - the email was from Andy Saperstein - national sales
MD (i.e. retail distribution) - who later blamed the NASDAQ for his


Perhaps this is a better representation of Andy's future...

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CaptFufflePants's picture

Hey a douche bag and he works in finance, how about that...

Colombian Gringo's picture

Yeah, I know douchebags, and he qualifies. He is so handsome and I love his wallet, er package.  Signed Modern Douchebag American Golddigger Female.

knukles's picture




I've seen men killed in cold blood for lesser gravitas.

prains's picture

keep up the mediocre work morgn schtanley

Oh regional Indian's picture

I like Margin Stanley.

Margin Stanley. Makes them sound like a cheap butler.


JPM Hater001's picture

my portfolio left Smith Barney just before the acquisition.

FEDbuster's picture

I wonder how their clients felt after being Zucked?

jez's picture

How much did MS lose again, propping up the price on the opening day?

At least we know now that they lost it in an "orderly" way.

Colombian Gringo's picture

Gravitas, is that what makes my breasts sag, signed product of the US educational system?

JamesBond's picture



So true at so many levels

Tsukato's picture

 Online I found a list of "bad words" which red flag emails, texts, etc. by the authorities. I thought to myself " most people are too afraid to ever rise up against the man, but perhaps there is some passive-aggressive action that most people could be bothered to do, and could keep the g-men busy/overloaded". This list of words should be spread to everyone, and attached at the end of every message we all write online, during chat, emails, etc. Please take this list, and pass it along to everyone you know. Thanks and vaya con Dios. Here is where to find the list:

NeedleDickTheBugFucker's picture

Done in way that was orderly, fair, well-communicated....

The question is to whom?

urbanelf's picture

Prisoner #2466537 will stop asking questions.

Matt's picture

It all depends on who and how the words are defined. Fairness, especially, is in the eye of the beholder.


Besides, other than that whole "giving lower revenue guidence to select institutional investors" thing, most of the blame goes to the HFT algos, right?

dizzyfingers's picture

Matt: "It all depends on who and how the words are defined. Fairness, especially, is in the eye of the beholder."


JackT's picture

People can only blame themselves, even though they will scapegoat anyone they can.

mendigo's picture

I think the client here was FB et al.

Seems to me that MS pretty much nailed it for the client.

The valuation was never there.

Folks need to get real.

guinea's picture

I think our entire admissions process (MBA, undergrad) and corporate HR hiring system selects for sociopaths, since applicants are constantly forced to sell themselves up to absurd superhuman levels.  The ones who make it through the cut are probably the most shameless sellers of them all.  I went through some aspect of it myself when I applied to medical school, but at least we had solid grades and test scores to back ourselves up, and even then I felt a little dirty bragging about my research.  The MBA selection process in comparison is much more amorphous and about "making the sale" with their emphasis on Powerpoint presentations and resumes. 

This email was clearly written by a sociopath.  But we reward a douche like this and consider him as having good social and leadership skills.

How much talent is lost and undiscovered due to shitty ass HR requirements and clueless HR people?

hidingfromhelis's picture

It's self-perpetuating too.  These people, once they attain positions with power/influence due to their sociopathic personalities, encourage hiring of others like themselves.  No wonder we're in the crapper.

LeBalance's picture

but all the roaches have gravitated to the motel..erm financial sector...erm public service the pest control can commence with relative ease.

hooligan2009's picture

i am astill optimistic that we are only talking about the 10%, led by the 1% who think they have a monopoly on financial well-being

hooligan2009's picture

Firstly, declaration of interest. I have an MBA. I chose the MBA (Executive) instead of a CFA because in 1987, the world was a little precarious and I thought it might come in handy to instil any missing common sense from starting up and running a business. It is just that. You don't become a salesman because you have done an MBA. I didn't have a degree so I had to do the IQ tests (yes I know if the average is based on moronics that doesn't mean much) but I also had to gain a degree with a minimum of 72% across all modules in the first year, to be able to proceed to the MBA qualification modules (basically 16 hour days for three years). There are a few components that I still use in my present work, but none of them includes sales techniques. I learned these from an insurance company (you know, Relax, Disturb, Reassure and Sell). What I have seen is that it is not the qualification that drives business decisions, it is short termism and panic. Referred to in MBA teachings as "bush fire management" rather than strategic planning. The outcomes we see are more to do with a complete lack of understanding of quality right across society, other than in some notable exceptions.

It occurs to me that the sellers of Facebook were happy at 28 dollars and probably sold there to Morgan Stanley, who pocketed the difference by ramping the IPO. We are splitting the difference between a 38 dollar IPO sale price to muppets and a 28 dollar buy price to MS. Right price? Well we can all guess the discounted value of free cash flow with an assumption about redundancy in five years and a level competitive playing field (think Yahoo v an emerging Google pre- and since Y2K). 

jekyll island's picture

There is an additional number of shares available to MS for handling the IPO.  It's kind of like printing money - they can sell them and pocket the proceeds in addition to the fees that they charge. 

ZeroPower's picture

Syndicate managers (who are responsble for pricing and allocating to the bidders new debt or equity issues) get some allocation at less than market value.

Goldtoothchimp09's picture

Why is it that MBAs relish in tossing around jargon and are such vapid, vacuous Vags?!

hint:  there is no point to your entire post hooligan2009

Larry Dallas's picture

Considering that everyone who works on Wall Street is a salesman, and I mean everyone and I'm speaking from my own personal experience, doesn't it make sense that those who can sell the hardest gets to the top?

Maybe their not as blantant as a carival hawker, but those who are the wealthiest generally have one thing in common: the ability to sell their ideas and influence others.


l1b3rty's picture

Crash JP Morgan Buy Silver @ Silver Liberation Army


Caviar Emptor's picture

Wall Street has been in a state of pseudo-nationalization since 2008: fully bailed, recaped, accounting rules suspended, and an ongoing guaranteed revenue stream from the Fed teet. 

Should we be surprised that they botch things that used to be important in terms of profit and take home pay?

Not when they already know that they're going to be supported no matter what.  

TBTF, TBTSucceed

The Monkey's picture

True, but investors have been chasing profits based on PE, PEG, etc as they always have. Herein lies the conundrum. The market has not solely rallied on the Fed. The market has rallied on earnings momentum. The magnitude of the rally was greatly enhanced by the Fed. The Fed can chase out shorts and help change earnings incrementally by weakening the dollar. But more importantly Fed policy affects risk perception and thus changes flows. If investors are subject to a central bank that actively works to reduce the value and returns of risk-free investments (cash equivilents), they perceive other investments as less risky on a relative basis.

Ultraloose policies always have a payback. Prices that were unnaturally levitated on the way up set up the conditions for a spectacular fall when rate of change moves into negative territory. The Fed suppressed the price of risk and now it's payback time for the grand experiment.

A lot of people are going to be rather pissed off soon, so I trust those currently at the helm are rehearsing their story.

disabledvet's picture

while i disagree that "the Plan" was to levitate prices across the board (stick to what's doable: keep interest rates at or near zero so the country doesn't have a financial weapon of mass destruction go off in Washington instead of New York where it already has) i do agree "the market apparently too it that way" and bid up the prices of everything across the board. while tactically the dollar did weaken, commodities recovered from their collapse in 2008, treasuries initially sold off dramatically, the Administration when on "the mother of all spending binges" and "inflation trades" have been the core of the BULK of all trading strategies on The fact (with the media megaphone screaming SURE THING!) i think you are right. Now the "Grand Speculations" in commodities, unlimited pricing power and dollar shorting are coming home to roost. Treasuries continue to surge, the dollar is now clobbering the entire planet, forget the "euro zone banking system"...the EURO ZONE ITSELF is on the verge of collapse, China is tanking, the BRIC's are sinking like a brick--in short THE PHUCKING POSERS ARE DEAD AGAIN! Now the REAL GAMES begin...namely "NOW Y0U PHUCKING PAY ASS WIPE."

dizzyfingers's picture


Let's cross our fingers. But they're not dead till their heads are off.

The Monkey's picture

Don't get too bearish too fast. Bull markets die hard.

ItsDanger's picture

MS will be facing a multitude of lawsuits on this one.  The poor execution of trades has more to do with the exchanges.  But the non-disclosure of earnings estimates is on MS big time.  Im short MS from 21 to be fair here.  Full disclosure of estimates is a big part of the IPO process and it seems they have failed in that area miserably.  (or perhaps suceeded depending on your point of view)

El Hosel's picture

MF Global/JPM/MS/GS/C/BAC/WFC/JEF....... Too Big to Fail, too Big to Bail, too Big to Jail.  The billionare boyz club  frying their own nuts, in broad daylight.

 pass the Crisco Banker Bitchez.

I should be working's picture

Good call, I'm starting to think to can just be short most financials all the time.

They should make an ETF, long all sectors short financials. Bet it would be up 20% since 2007.

Divine Wind's picture

Fricken brilliant. The ultimate contrarian investment.

Cursive's picture

His e-mail belongs on the $10,000 pyrmiad as an answer to "Things You Say to Justify Your Pathetic Existence."

Morrotzo's picture

I don't quite get the joke. Is that a man being thrown under some passenger vehicle? Could it possibly be a bus?



Matt's picture

yes, it is a man being thrown under a bus.

Zerohedge is implying that Andy will be the one to take the blame for the failure.

I should be working's picture

Yeah go team! Way to create value for our shareholders, oh wait...

Ah screw it, who cares about that. Way to rip off some muppets on our way to a fat bonus. Meanwhile hope you don't own FB, MS or pretty much any other financial for that matter.

With the pleasure these assholes take in ripping off their shareholders it's a wonder they have shareholders...

faustian bargain's picture

Morgan Stanley Smith Barney. We make money the old fashioned way: with insider trading.

dizzyfingers's picture

"Morgan Stanley Smith Barney. We make money the old fashioned way" That commecial always bothered me.

Dineroguru's picture

Hey they were just doing God's work, just like Lloyd, Jamie, John, et alll

Raymond Reason's picture

Careful, he's using some kind of advanced neuro linguistic hypnotic technique.