As banks compete to become top underwriter for Uber's 2019 IPO, sources say Morgan Stanley, whose top tech banker moonlights as an Uber driver, is the favorite
hardly necessary, given his multimillion-dollar salary—may help Morgan Stanley win a role on the most hotly anticipated IPO in years http://www.wsj.com/... Tripp Mickle / @trippmickle : Morgan Stanley banker Michael Grimes moonlights as an Uber driver in order to get an edge on the company's IPO. He also had his staff wear rock concert t-shirts to pitch for Pandora's business and he rented an apartment in Venice while pursuing Snap. http://www.wsj.com/... @wsj : A Morgan Stanley banker moonlighted as an Uber driver for years—a side gig that could help the bank win a coveted top role in the IPO http://www.wsj.com/...
Context & Ripple Effects
Morgan Stanley's bid for the top spot on Uber's IPO is the culmination of a multi-year courtship, not a pitch-day contest. The bank already sold a $1B-$2B leveraged loan for Uber in 2016 alongside Barclays, and ran a fund giving investors indirect Uber equity that buyers took without seeing the company's financials — relationships that put its bankers inside the account long before the listing was real.
What makes the story color is Michael Grimes, the bank's top tech banker, who reportedly drove for Uber for years to understand the client from the driver's seat — part of a pattern that also included concert t-shirts for Pandora staff and a rented Venice apartment during the Snap pursuit. With multiple banks competing for the most hotly anticipated IPO in years, sources now say Morgan Stanley is the favorite.
First-order effects
- Morgan Stanley moves into pole position for the lead underwriter role on the year's most anticipated IPO, with the league-table credit and fee pool that come with it.
- Uber holds the leverage in mandate negotiations: rival banks competing for the top slot must outbid each other on economics and commitment while Grimes-style relationship work sets the bar.
Second-order effects
- Competing banks are pushed toward escalating courtship tactics — embedding bankers in clients' operations and building multi-year advisory histories — because a standard pitch no longer differentiates at this deal size.
- Morgan Stanley's earlier Uber work compounds: the loan syndication and the indirect-equity fund gave it distribution relationships with institutional investors that rivals must now replicate before they can credibly claim the mandate.
Third-order effects
- If the pattern holds, marquee tech IPOs will be awarded years in advance through sustained relationship investment rather than contested at listing time, concentrating top mandates with a small set of banks willing to commit senior bankers to single accounts.
- The personal-stakes model Grimes embodies — bankers literally living their clients' product — points toward underwriting becoming a service layered on top of deep operational familiarity, raising the bar for what banks must do to win the next generation of listings.
The trend: Mega-IPO mandates are shifting from pitch-day competitions to prizes decided by years of accumulated relationship capital between banks and their founder clients.