by Jennifer Post Stoudt
Five hundred million dollars was at risk, but Andrew Pipa 84
remained calm, barely breaking a sweat.
A major company was being added to the S&P 500 and Morgan Stanley,
a global financial services firm, knew the company would have extra
stock that needed to be purchased. So they took the risk and committed
500 million dollars of capital to transact and sell. The risk was all
on Pipas shoulders.
We announced at noon that we were raising capital for this company,
Pipa says. Im down there on the desk with about 15 people
standing around me and I watched the stock go way down. But all
of a sudden, he says, it went back up. It became a very, very
Amidst a sea of computers and phones, everyone was screaming at the
top of their lungs, he says. The phones were ringing, lights were
It was crazy mayhem. It truly looked like total disorganization.
But, when the bell rang to close the market at 4 p.m., the stock was sold, the investors were pleased, Morgan Stanley made a fee and we had no risk in the end,
Pipa says. Everyone burst out with excitement; cheering, shouting and
clapping, Pipa says. It was very big for Morgan Stanley and I
was right in the middle of that excitement.
Pipa, a managing director for Morgan Stanley in New York City, says
its that kind of excitement that gets his juices going.
After graduating from Albright with a degree in business, Pipa says
he was interested in the field, owned stocks and had a taste for it,
but didnt have much access to Wall Street. Although he was determined
to make his dream become a reality.
Soon after graduation Pipa decided to attend graduate school. While
working towards his MBA at the University of Chicago, he went to work
as a general hire for Salomon Brothers, the Kings
of Wall Street, in 1985. He worked through their formal training
program which, he says, introduces you to everything on Wall Street.
Its the same program that Michael Lewis chronicles in his best
selling book Liars Poker. In fact, he says, Lewis
was in the training program just before me.
Following a three-year stint in London where he traded corporate bonds
and then, started his career in convertible bonds, Pipa eventually came
back to the states to work for Morgan Stanley in New York.
a managing director, Pipas primary role is to be a risk manager
for Morgan Stanleys capital and provide liquidity to its customers.
He, along with his staff of traders and salespeople, trade convertible
bonds, a complex product primarily used by large institutions such as
banks and mutual funds. In fact, Morgan Stanley controls 23 percent
of the convertible bond market. Were basically a quarter
of the market, he says. That is exceedingly high. Its
the highest share in this product, he says confidently.
Convertible bonds, Pipa says, are considered over the counter products. That means you cant look at a computer screen and get a quote for them, he says.
When a customer has a desire to do something in this product
they actually have to call Morgan Stanley. Convertible bonds,
which he refers to as kind of a geeky product in a lot of ways,
is not standard bond, not standard equity, but a derivative of that,
he says. Its a hybrid security really. Its a bond
that pays a coupon, has a maturity, but also has the attraction of being
convertible into stock.
Although the days are long, Pipa says theres nothing else hed
rather do. Awake at 4:15 a.m., he is driven to the train station from
his Long Island home and arrives at work between 6:30 and 6:45 a.m.
At this time hes ready to evaluate the market, scour the newspapers
for any pertinent information, conduct his own analysis of where he
thinks the market may or may not go that day, and look at the value
of the securities he will trade. But as the clock strikes 9:30 a.m.
and the market opens, Pipas adrenalin starts pumping as he heads
down to the pit to get on the phones and start trading.
In a job where stress levels rise by the second, Pipa takes it all
in stride. Yes, its a stressful job, he says. However,
I thrive on it. As he sits relaxed in his office chair, he says,
At first, its extremely stressful. But you learn how to
cope. If you dont, a lot of people burn out by the time theyre
40. Youve got to learn how to remove the emotional attachment
to losing money.
In addition to trading, however, Pipas other main role involves
managing his department. Teamwork, he says, is the key to success. Working
in convertible bonds is as close as one can get to playing for
a professional sports team. You work with a group of people and try
to figure out how to win everyday. But he stresses that the environment
at Morgan Stanley is not about being that person who says, Hey,
look at me. I just came up with the best idea so pay me millions of
dollars. Thats just not the environment that we instill,
he says. Everything is about working as a team.
Although, Pipa admits he is a fan of winning. In fact, its that
competitive spirit that gets him up at 4:15 a.m. everyday,
he says. The business is constantly challenging. It never gets
old, it piques my interest, and the educational process never ends.
Plus, he adds, We have highly paid, sophisticated and smart people
working here. We all have a common drive to be successful.
Its also a wonderful business for young people, Pipa says. It
requires a lot of energy, thought and intelligence. It really keeps
Working for Morgan Stanley has definitely kept Pipa going. Morgan
Stanley has given me a lot of responsibility, and I continue to grow
and get more involved in a lot of other avenues of the business.
For Pipa, Everyday is new and different, he says. Ill probably continue to do this until it doesnt excite me anymore. But, he says with a smile, I dont see that happening soon.
|When Terror Struck...|
On the morning of September 11, Andrew Pipa 84
was in a meeting with several senior partners in the Morgan Stanley office
building in Times Square. All of a sudden, he says, one
of the secretaries came in and said that the World Trade Center had been
hit. Realizing right away that there were numerous bond brokers
in the Towers with whom he worked everyday, and 3,700 Morgan Stanley employees,
Pipa got on the phone immediately.
I was on the phone calling Canter Fitzgerald when
the second plane hit, he says. But the phones were dead.
Then he tried another friend. Again, there was no answer. I had
no idea what had happened to our employees and other brokers from other
some of those guys who I speak to 40 times a day.
But, he says, when the first plane hit, Morgan Stanley
security didnt waste a moment. They evacuated all of the firms
employees from the Towers. Thats why, even though we had the
most people in the Towers, we only lost six people, he says. Of
course, he adds sadly, Its unfortunate that we lost six people,
but it could have been a lot worse.
When the second tower went down, Pipa says, his office
building in Times Square was also evacuated. Because we have a ticker
tape on our building and were in Times Square weve always
thought that we could be a problem.
With no trains running, the bridges closed and almost
the entire city shut down, Pipa says he finally got home at about 10:30
p.m. Tired and glad to be with his family, he was relieved to find out
that his close friends who worked in the Towers were okay.
Now, even after a week of the market being closed, Pipa says things are pretty much back to normal in the sense of day-to-day business. Companies are putting more safety precautions in place and people are more conservative now, he says, but basically, everyones just trying to get back to normal.