Dick Bove, who a week ago said Morgan Stanley was doomed to fail as Lehman did, now makes a full 180 about his prospects for the bank.
The reason? Bove thinks that new Morgan Stanley head James Gorman is more “cerebral” than his predecessor, John Mack, a banker whose actions Bove has roundly criticized in the past.
Beyond merely being cerebral, Bove also considers Gorman “the right person,” who “has been very effective in developing long range plans” and “knows how to execute.”
“It is likely that he (Gorman) will build a long-term business model for the company,” Bove wrote in a report to investors.
“This model is likely to enhance the firm’s position as a top-ranked investment banking firm.”
“It is likely to stabilize and develop a longer term strategy for trading. Most important, Mr. Gorman might be able to reduce the turmoil in management that has now characterized this company for a decade. This change is a plus for the company and a plus for the stock.”
Mack, who will remain as Morgan Stanley chairman, will most likely remain a force behind Gorman, The New York Times reports. The two men will still have offices next to each other.
Gorman considers Mack’s legacy secure.
“John came back and stabilized the company and brought back the pride,” Gorman says.
“He made the right calls at the right time in an incredibly stressful situation.”
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