James Gorman said that investors upset about Uber Technologies Inc.’s stock slide should take a longer view.
“You should buy into IPOs to hold them, because you believe in the company,” Morgan Stanley’s chief executive officer told reporters after the firm’s annual shareholders meeting Thursday. “I’m not going to predict the future of the stock, but yeah, Uber’s a great company.”
Gorman’s bank has faced blame as lead underwriter after Uber plunged following its widely anticipated initial public offering earlier this month. Uber tumbled 18% in its first two days of trading amid an abrupt flareup in U.S.-China trade negotiations that drove global markets down and the recent dismal performance of rival Lyft Inc. Uber shares are still down about 10% from the IPO price.
“That came to market during a very difficult week,” said Gorman. “You do your best to find price transparency” after thousands of hours of talking to investors, he said.
Gorman has been in this spot before. In 2012, his bank faced questions after Facebook Inc. had its own post-IPO slump, prompting Gorman to predict the technology company would be back to its $38 offering price within 12 months.
“I went on TV and said within a year it will be back to flat,” Gorman said. “And it took a little longer, it took about 15 months, and now it’s $180-something.”