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Wow, when companies complain about short sellers, it's generally pretty dumb (and a sell signal), but this sounds like MS was trying to help people get around lockup agreements which is pretty bad behavior if true.
Some other stories on this: https://nypost.com/2019/04/05/lyft-threatens-morgan-stanley-... https://techcrunch.com/2019/04/05/morgan-stanley-which-is-un... https://www.theinformation.com/articles/lyft-threatened-morg... The NYPost story includes the detail "We bought stock in a special acquisition vehicle and then the individual investors in the special acquisition vehicle shorted shares through Morgan Stanley ... Pr…
The nypost's articles are being written by reporters who don't understand what they are writing. The same authors wrote the original article (" https://nypost.com/2019/04/01/early-lyft-investors-are-betti... ) which is full similar errors. Obviously, if the investor engages in a transaction that leads to them to not benefiting from a rise in the stock, they've reduced their economic interest! The answer (as I note el…
You've put your finger on the core of the legal dispute, what "reducing economic interest" means. The reporter did an excellent job explaining that. Now it'll be up to a court to figure it out.
If Lyft IPO price had been lower (... or more reasonable) this problem would not exist.
Earlier quoted context omitted.
From the article > tortious interference with the lock-up agreements
I always wonder how these can be enforced anyway, same for employees. Employees carry a huge risk in case the Lyft stock falls flat, they still have to pay all the taxes and company might not withhold enough (dont have any details on that, but it's rather typical) - will be interesting to watch how this goes down.