MS - Why Eaton Vance Stock Rocketed as Much as 48% Today
Shares of asset manager Eaton Vance (NYSE: EV) rallied as much as 48% in early trading on Thursday. The massive gain was holding firm by 11 a.m. EDT. Investors can thank finance giant Morgan Stanley (NYSE: MS) for the price move, though Morgan Stanley's shares were down slightly at the open. But it's not unusual for the acquiring company in a merger to see its price fall. At 11 a.m. today, Morgan Stanley's stock was around breakeven.
Morgan Stanley has agreed to buy Eaton Vance for roughly $7 billion. It is a continuation of a larger trend in the finance sector where more-traditional active management shops are being consolidated into larger entities that are looking to expand their assets under management base. Companies like Eaton Vance, meanwhile, have been facing pressure from low-cost alternatives, like exchange-traded funds (ETFs), that have been growing in popularity in recent years. The pairing-up, in many ways, makes a great deal of sense for both companies. Once finalized, Morgan Stanley expects to oversee $4.4 trillion in client assets.
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Why Eaton Vance Stock Rocketed as Much as 48% Today