By Mathew Katz
Congratulations, folks. You just made a 20 percent annualized return on your investment into Morgan Stanley.
The bank today agreed to pay $950 million to buy back warrants from the Treasury after it bought $10 billion in stock to help rescue Morgan Stanley in October. Morgan Stanley has now repaid that loan, with the price of the warrants on top of that. Overall, the government made a $1.27 billion dollar profit, between warrants and dividends.
Of course, as with other warrant buybacks, the deal largely frees the bank from government-enforced restrictions on things like bonus payouts. Still, unlike Goldman Sachs, which also bought back its warrants last month, Morgan Stanley reported a larger-than-expected second-quarter loss. That's not exactly a bonus-worthy performance, but banks have been eager to throw off government restrictions ever since the TARP program began in October.
categories: Wall Street
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