Curiously missing from Silver Spring Networks’ latest SEC filing for its IPO is its former lead underwriter Morgan Stanley, which had the coveted “lead left” spot until earlier this year. It could be a sign that the bank’s tech franchise, which has been the envy of Wall Street but was criticized because of its role in the botched Facebook IPO, is not as illustrious as it used to be.
Morgan Stanley had the lead role as of a Nov. 30 filing by Silver Spring, which provides networking technology for power grid companies. But in its Jan. 22 filing, Morgan Stanley is no longer there and Goldman Sachs, which had the second spot, is now the lead underwriter. Credit Suisse, which was in the third spot, is now the second lead underwriter.
People familiar with the matter said California-based Silver Spring, which has had its plan to go public put on hold since 2011 when the markets took a slide, ended up disagreeing with Morgan Stanley’s strategy for the company. Morgan Stanley had been listed as the lead underwriter in Silver Spring’s SEC filings since 2011.
Silver Spring did not return a call seeking comment. Morgan Stanley declined to comment.
Outside of IPOs, Morgan Stanley was also shut out as an adviser in the Dell leveraged buyout. The PC maker traditionally used the bank for deals, but the parties involved in the buyout used seven other firms—not including Morgan Stanley—for the planned $24.4 billion transaction.
Morgan Stanley’s tech team was seen as untouchable until the Facebook IPO last year, for which it was lead left and played a critical role in the decision making in the lead up to the highly anticipated listing. But Morgan Stanley got a lot of blame when the listing didn’t go as expected, and the bank was criticized for helping to set a share price and offering size that exceeded demand. The IPO price came in at $38 per share, but the stock is trading in the $29 range.
According to Dealogic data, Morgan Stanley has fallen out of the top spot to No. 2 in terms of the total value of listings for global tech IPO bookrunners since May 18, when Facebook went public. But the bank is still No. 1 in the number of IPOs it has worked on, with seven under its belt since May 18 compared to JP Morgan, which has five. JP Morgan is No. 1 in terms of value of deals since the Facebook IPO.
For US technology IPOs since 2011 to the present, Morgan Stanley is the No. 1 lead left underwriter, according to Dealogic.
Given the public hit that Morgan Stanley took for Facebook, its relative resilience shows that its reputation for having the best tech team among the banks still rings true for many clients. But there do appear to be cracks in the armor.