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Rumor fuels shares of Morgan
Associated Press
Published April 30, 2005
NEW YORK - Shares of Morgan Stanley rose sharply late Friday after a television report said the Wall Street firm's board of directors was holding an emergency meeting today to determine the fate of embattled chairman and chief executive Phil Purcell.
Business news channel CNBC reported that the board would meet today and could strip Purcell of one of his two titles or the board would move to dismiss Purcell.
A call to Morgan Stanley was not immediately returned.
Morgan Stanley climbed $2.18, or 4.3 percent, to $52.62 on the New York Stock Exchange. The stock experienced a late surge in volume on rumors of Purcell's departure.
Pressure on Purcell has steadily built over the past month as shareholders and former executives launched a campaign to have him ousted because of the performance of the company and its lagging stock price.
The departure of a number of high-level executives, including five of the 14 members of Morgan Stanley's executive committee, also called into question Purcell's ability to lead the company. Investors fear that the crisis of confidence in Purcell would result in Wall Street firms cherry-picking Morgan Stanley's top talent, further damaging the company's long-term prospects.
The dissident group this month persuaded major institutional investors, including most of the nation's major pension funds, to ask Morgan Stanley to review with them the company's long-term plans.
According to Morgan Stanley's bylaws, 10 of the 13 members of the board must vote to fire Purcell.
[Last modified April 30, 2005, 00:50:14]
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