“He is truly a tech geek,” Sequoia’s Goetz said.
Finger-Pointing
As Uber initially tanked, several investors and competing senior bankers on Wall Street privately pointed fingers at Morgan Stanley and, by extension Grimes. Others sympathized, noting the broader market turmoil set off by U.S.-China trade negotiations, and the recent dismal performance of Uber’s smaller competitor, Lyft Inc.
Either way, tech executives tend to focus more on the outcome for the company going public. As the thinking goes: Yes, bankers from Morgan Stanley and Goldman Sachs privately floated a potential $120 billion valuation for Uber last year that leaked to the public. But that’s just how the marketing machine works. On Friday, Uber was worth a respectable $71 billion.
Grimes has been in the hot seat before. Shareholder lawsuits flew after Facebook’s troubled IPO. That same year, Google found itself facing legal claims over its plan for a stock split. Shareholders claimed the move, designed with input from Morgan Stanley, would have unfairly allowed the search engine’s founders to extend their corporate control.
Since then, however, Grimes has increasingly served as the public face of Morgan Stanley in Silicon Valley. While Goldman Sachs and JPMorgan Chase & Co. often send their CEOs or other senior-most executives to court clients, Grimes has the clout to rep his bank himself from his base in Menlo Park. He often makes the rounds at the same charity events that draw the big names in technology.
Wall Street, for its part, is already moving on from the Uber IPO. Goldman Sachs and Morgan Stanley are among banks expected to help Slack Technologies Inc. list directly within weeks, making it the first high-profile U.S. company to use that highly unusual method since Spotify Technology last year. Other unicorns inching toward public markets include WeWork Cos. and Palantir Technologies Inc.
Grimes doesn’t always win, of course. Morgan Stanley is this year’s top lead underwriter of technology IPOs, but Goldman’s tech, media and telecom team, led by Nick Giovanni and Pete Lyon, currently ranks as that industry’s premier M&A adviser, according to data compiled by Bloomberg.
And there’s a risk that Morgan Stanley’s investing clients will start to stay on the sidelines if they suspect the firm’s bankers are taking them for granted. One large Uber investor had blamed the banks for pricing the IPO too high in the first place.
During the roadshow leading up to Uber’s IPO, underwriters gathered more than 100 institutional investors for an exclusive lunch at Manhattan’s Mandarin Oriental Hotel, telling attendees the location only shortly beforehand to ensure the meeting stayed exclusive.
One investor accustomed to such pitches said it was unusually crowded, with hedge fund managers bumping shoulders as they sat on folding chairs trying to eat pasta. Grimes and executives spoke, but the investor said the answers to questions were too anemic. Uber’s leaders may have been pleased by the performance, but he decided not to buy any shares.