>Even a basic understanding of incentives (let alone stock shorting) shows the absurdity of the headline. If Morgan Stanley purposely overpriced the IPO and the

>Even a basic understanding of incentives (let alone stock shorting) shows the absurdity of the headline. If Morgan Stanley purposely overpriced the IPO and then shorted it - it would tarnish their reputation and future IPO prospects. You do know Morgan Stanley was fined $4.4B for their roll in selling toxic assets to their investor clients while internally selling off the same securities, which they knew were toxic. Morgan Stanley’s reputation is they will sell their clients shit that they know is shit, and if they own the shit themselves they will also sell it off further driving down the price of the shit you bought from them. They will happily pay the fines because they make more money than the fines. They don’t care about their reputation because they don’t have one and their track record shows they can commit any abuse they want and moron investors will still give them their business.