October 1, 2008

HOW THEY ROLL

Energias de Portugal (EDP) is the national energy producer for Portugal. For insight into how Morgan Stanley conducts its investments on the open market, the following are excerpts from a release by EDP announcing the sale of stock to Morgan Stanley subsidiaries. See if you can follow along:



      “On April 21, 2008, Morgan Stanley notified EDP that as a result of a share transaction concluded on the 16th of April 2008 and in accordance with article 20 of the Portuguese Securities Market Code, it became (sic) to hold 79,157,462 ordinary shares of EDP, which represent 2.16 percent of EDP share capital and 2.16 percent of the voting rights and 16,745,810 convertible bonds into EDP shares, which represent .46 percent of the EDP share capital and an imputation of .46 percent of the voting rights.”


OK. Fairly straightforward. How did they do it? Take a deep breath and read the following sentence out loud.


   Morgan Stanley & Co. International — which is owned by Morgan Stanley UK Group, which is owned by Morgan Stanley Group (Europe), and this is owned by Morgan Stanley International Limited, that is owned by Morgan Stanley International Holding Inc that is owned by Morgan Stanley — holds 68,334,088 ordinary shares of EDP, which represent 1.86 percent of EDP share and capital and 1.86 percent of the voting rights and 16,745,810 convertible bonds into EDP shares, which represent .46 percent of EDP share capital and an imputation of .46 percent of the voting rights;


But wait, there’s more...


      Morgan Stanley & Co. Incorporated — which is owned by Morgan Stanley — holds 9,485,622 shares representing .25 percent of the share capital and .25 percent of the voting rights;


      MSDW Equity Finance Services I (Cayman) Ltd — which is owned by MSDW Offshore Equity Services, which is owned by Morgan Stanley — holds 1,000,000 shares corresponding to .02 percent of the share capital and .02 percent of the voting rights;


    Morgan Stanley Capital (Luxemborg) S.A. — Which is owned by Morgan Stanley International Holdings Inc, which is owned by Morgan Stanley — holds 316,552 shares representing .00 percent of the share capital and 0.00 percent of the voting rights;


    Bank Morgan Stanley AG (Zurich) — which is owned by MSDW Equity Finance Services I, which is owned by MSDW Offshore Equity Services, which is owned by Morgan Stanley — holds 21,200 shares corresponding to 0.00 percent of the share capital and 0.00 percent of the voting rights.