Morgan Stanley (NYSE:MS | MS Price Prediction) shares fell more than 4% yesterday and have shed nearly 12% over the past month. Reddit’s financial communities continue to pile on. Sentiment across r/stockmarket and r/stocks has held bearish 30 to 35 out of 100 for the past 24 hours. The catalyst: Morgan Stanley capped redemptions at its North Haven Private Income Fund after investors tried to pull almost 11% of shares outstanding in a single quarter.
The Redemption Gate Driving the Fear
The fund returned only roughly $169 million, or about 45.8% of investors’ tender requests, fulfilling just 5% of units outstanding. Morgan Stanley says limiting withdrawals avoids forced asset sales during “periods of market dislocation” and that credit fundamentals remain broadly stable. Reddit is not buying it.
The top post in r/stockmarket, “Morgan Stanley restricts redemptions at private credit fund after withdrawals surge,” has accumulated 388 upvotes and 119 comments, with the author closing with: “First JPM now MS.”
Morgan Stanley restricts redemptions at private credit fund after withdrawals surge
by u/gamjatang111 in StockMarket
A second post in r/stocks, “When you see one cockroach, there are probably more,” links the news to JPMorgan’s simultaneous decision to rein in lending to private credit firms and mark down software loans, closing with: “Jamie Dimon is right once again.” That post sits at 349 upvotes. The bearish case:
- The roughly $2 trillion private credit market faces systemic stress, with JPMorgan marking down software-linked loans and tightening lending to the sector
- Blackstone’s BCRED fund faces similar redemption pressures, suggesting an industry-wide issue
- Investors are questioning whether redemption gates signal deeper problems with loan portfolio quality, particularly among software borrowers facing AI-related credit risks
What Reddit Is Missing About Morgan Stanley
The private credit fund is one slice of a firm that generated $70.6 billion in full-year 2025 revenue and $10.21 in EPS, beating consensus every quarter last year. Investment banking revenue surged 47% year over year in Q4 2025, and wealth management pulled in $356.3 billion in net new assets for the full year. Analysts carry a consensus price target of around $196 against a current price of $154, with 9 buy ratings and only 1 sell among the 25 analysts covering the stock.
The stock trades near its one-year low despite being up 47% over the past twelve months. The key question is whether private credit stress broadens beyond redemption gates into actual loan losses. That would be a fundamentally different problem than what Morgan Stanley is describing today.
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