Morgan Stanley is in the early hours of Lyft Investors' Letter to the Ride-Hailing Company.
On Monday, The Post Morgan Stanley, the lead underwriter for UB's upcoming IPO, had been helping Lyft's pre-IPO investors against a decline in the stock – despite "lock-up" agreements its public stock offering.
Three sources – Morgan Stanley and a pre-IPO investor who hedged through the bank – Morgan Stanley was involved in the bets.
On Thursday – three days after The Post story ran – Morgan Stanley asked for a statement on hedging activity tied to Lyft.
"Morgan Stanley did not market or execute total r eturn or hedging products, or any short product on Lyft shares, "the statement said.
But sources, including the pre-investor IPO investor who
"Morgan Stanley, Morgan Stanley," according to the pre-IPO investor.
"We bought stock in a special acquisition vehicle. [MorganStanleyMorganStanleyEngagedin"TortiousInterference"accordingtoaMorganStanley'sDenialComesontheHeelsofaHarshlyWrittenLetterbyLyftQuestioningMorganStanleycopyoftheApril2letterreceivedbyThePost
Lyft's letter, which was first reported by The Information, also called "the legal action and warning of potential regulatory repercussions."
The Financial Industry Regulatory Authority has started collecting information about Lyft's The Post.
Meanwhile, Morgan was silently offering the bets, known as total return swaps, as of Friday evening, one of Wall Street's executives briefed on the transaction. 1
Lyft was one of the most hotly ticipated IPOs of 2019. Shares of the oversubscribed IPO soared 21 percent immediately after their Nasdaq debut on March 29
"It's about dirty tricks being employed," a source familiar with Lyft's thinking told Post, noting that Morgan Stanley is about to lead IPO underwriter.
Pre-IPO investors are contractually barred from reducing their "economic interest" in Lyft for six months, which includes shorting the stock. But sources say Lyft investors worked around the lock-up language. Instead, they simply lock in their IPO gains, which were significant.
Reps from Lyft declined to comment. Morgan Stanley declined further comment.