Morgan Stanley, owner of the world’s largest brokerage, sank to its lowest closing price since December 2008 as investors weighed a potential credit-rating cut, Europe’s debt crisis and lower trading revenue.

The firm fell 37 cents, or 2.9 percent, to $12.36 at 4 p.m. in New York trading, its third decline of more than 2 percent in the last four trading days. That’s the lowest since Dec. 2, 2008, less than three months after the collapse of Lehman Brothers Holdings Inc. roiled global markets.

Moody’s Investors Service may reduce Morgan Stanley’s credit ratings by as many as three levels, the most among U.S. lenders. The cut could force the firm to post added collateral and pay more to borrow. Ed Najarian, an analyst at International Strategy & Investment Group Inc., said in a note yesterday that the firm’s fixed-income trading revenue probably will drop by half in the second quarter as risk-averse clients pull back.

“The fragility has a lot to do with the lack of their core funding structure,” Charles Peabody, an analyst with Portales Partners LLC, said in an interview on Bloomberg Radio’s “Bloomberg Surveillance.” “They don’t have the same core deposit base that a Bank of America or a Citigroup or even a JPMorgan might have. I think it also has to do with where the franchise in its evolution. They’re still very much in a transition phase.”

The shares of the New York-based company are now trading at 45 percent of tangible book value, the lowest among the six largest U.S. banks and a level that Chief Executive Officer James Gorman deemed “inexplicable” last month.

Sliding Value

Tangible book value measures the theoretical liquidation value of a firm that excludes assets such as brand names that would be worth little or nothing if a company went out of business. Morgan Stanley has been trading below its total book value for more than two years.

Today’s close is lower than in October 2011, when swings in the stock price prompted Mitsubishi UFJ Financial Group Inc., the firm’s biggest shareholder, to put out a statement saying it was “firmly committed” to its alliance with Morgan Stanley. Gorman also sent a memo to employees on Oct. 3, urging them to remain focused on their jobs and clients instead of responding to “the rumor of the day.”

Mary Claire Delaney, a spokeswoman for the New York-based firm, declined to comment.