Breaking: Morgan Stanley (MS) beats, shares rise after CEO says Archegos losses are all out in Q1

Conference call update: CEO says all losses relating to Archegos are reflected in Q1 earnings. This means the bank smashed estimates even with the Archegos loss. CEO says money spent to de-risk from Archegos was money well spent and necessary. Shares popped and are now up at $81.15, +0.4%. MS shares had dropped as low as $79 before the statement.

Update: Morgan Stanley said revenue from institutional securities (i.e. stocks, to you and me) was up 66% in Q1 2021, fixed income (bonds) was up 44%, and investment banking revenues were up 128% in Q1 versus Q1 2020. All in all, a stellar performance. But it is not all rosy. 

Morgan Stanley also said, "The current quarter includes a loss of $644 million related to a credit event for a single prime brokerage client, and $267 million of subsequent trading losses through the end of the quarter related to the same event." I wonder who that could be?

Morgan Stanley reported Q1 2021 earnings on Friday. Earnings per share came in at $2.22 versus $1.70 forecast. Revenue was $15.7 billion versus $14.09 billion forecast. 

Market reaction

Morgan Stanley (MS) shares are trading at $80, down 1%.

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