Morgan Stanley Agrees to Buy Share-Transfer Fintech Vinyl

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Morgan Stanley has agreed to buy Vinyl Equity, a fintech that digitizes the manual work of moving shares between companies and their shareholders. The deal gives the bank its own transfer agent, a role that gets complicated when a company goes public.

Terms and timing

Financial terms were not disclosed. The deal is set to close in the first quarter of 2027. A Morgan Stanley spokesperson told Bloomberg that integration would cost $65 million over a couple of years.

Vinyl was founded in 2022 and raised $20 million in series A funding this year. Its CEO and co-founder, Rob Schoder, said joining the bank gives Vinyl a chance to bring its technology to a broader range of companies.

What the bank gains

Without Vinyl, the bank must enlist a third-party transfer agent for cap table management, equity administration or share transfer. Scott Whatley, head of Morgan Stanley at Work, told Bloomberg that clients had been asking for help with what he called antiquated technology.

Vinyl will join the workplace unit, which counts 6.7 million participants, more than 3,400 corporate clients and over 70 of the top 100 unicorns by market cap. That unit sits inside the wealth-management division, which posted a record $232 billion in net new assets in the third quarter. About half of that is linked to IPOs, the bank said last month.

Private markets and tokenization

Jed Finn, head of Morgan Stanley Wealth Management, said private markets are playing a bigger role as companies stay private longer. He added that blockchain technology, atomic settlement and tokenization are reshaping the industry.

Finn told Bloomberg that clients' concerns about data protection, cybersecurity and risk push them to want everything kept within the bank.

The purchase follows the bank's January acquisition of EquityZen, a trading platform for shares in private companies. TD Cowen analyst Scott Siefers called the Vinyl deal a "small transaction" that is strategically attractive because it strengthens a business feeding the wider wealth platform.

Source: Banking Dive