In late September, Mitsubishi UFJ Financial Group (MUFG) agreed to buy a 21% stake in Morgan Stanley for $9 billion, a seemingly sensible move for the expansion-hungry Japanese bank, and a lifeline for the capital-depleted American investment bank. Within weeks, though, Morgan Stanley was being pounded in the market. On Oct. 10, its stock closed below $10 some 60% below the price MUFJ had agreed to pay for common shares. The deal was renegotiated, and salvaged, but the damage was hardly contained. By late October, MUFG had announced that it would be raising $10.6 billion of its own, thanks to the battering it had taken in the Tokyo stock market and its adventures in investing in Morgan Stanley.
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