It is difficult to get excited about Morgan Stanley’s recently announced acquisition of ETrade. The latter is essentially a no growth business (P&L below), competing in a cut-throat market. On the other hand, Square – albeit a larger company that would command a larger price – is a FinTech leader in growing consumer markets.

If Morgan Stanley (tkr: MS) wanted to pursue consumer assets, why not move to acquire Square (tkr: SQ)?

• Square enjoys double-digit revenue and operating cash flow growth.
• Square is a leader in the rapidly growing peer-to-peer payments market.
• Square would provide Morgan Stanley with a digital currency play (Bitcoin is approximately 10% of SQ’s revenue).
• Users can trade stocks from their Square account.

---

---

• Asset Management
• Financial Services
• Fintech
• Investing
• Investment Banks
• M&A
• Mergers and Acquisitions
• Strategy
• Technology