What's the biggest check you've ever written? The biggest check most people will ever write is probably a few thousand dollars to cover first/last months rent and a security deposit for an apartment. Any larger amount, like a down payment on a home, is usually wired electronically. The same goes for the business world. A business will cut checks for employee salaries and maybe some smaller business deals, but for bigger transactions an electronic wire is by far the preferred method. On the other hand, there have surely been some very large checks written during the course of modern financial history, from the millions to the hundreds of millions of dollars. So what is the single biggest physical check ever written? We'll give you a hint, it starts with 9 and ends with 000000000. FYI, that's $9 billion…
So how in the world was a $9 billion check physically cut, signed, delivered and cashed? The infamous check writer was Japanese investment bank Mitsubishi UFJ and the check receiver was struggling American bank Morgan Stanley. It all went down in 2008, at the height of the worldwide financial crisis. The entire global economy was in a free fall and Morgan Stanley was collapsing along with it. Lehman Brothers had just failed and Bear Stearns was acquired for pennies on the dollar. By all accounts, Morgan Stanley was the next in line to go under. Desperate to prevent their demise, executives from Morgan Stanley reached out to several large foreign entities for a lifeline that would shore up the bank's finances and show investors they would survive. MS flirted with a state controlled Chinese bank for a time, but ultimately found a potential match with Mitsubishi UFJ. The problem was urgency. Investor confidence had decimated Morgan Stanley's stock price from nearly $60 a share to less than $10, and there didn't appear to be an end to the pain in sight.
Teams from both firms held an emergency meeting over Columbus Day weekend in October 2008. After 48 straight hours of negotiations, the two sides had a deal worked out and a final price tag. Mitsubishi would invest $9 billion into Morgan Stanley in exchange for a 21% ownership stake and a 10% annual dividend. At this point, under any other circumstances, the $9 billion would be wired electronically from one bank to the other. But there were a few problems with wiring the money. First off, it was a holiday weekend and banks would be closed in both countries until Tuesday. Secondly, wiring any amount of money usually takes 2-3 days and Morgan Stanley may not have survived another 24 hours! Finally, Morgan Stanley was itching to make a formal announcement of the merger as soon as possible in order to stop their stock price from plummeting any further.
Desperate for a solution to the $9 billion problem, one of the Morgan Stanley deal makers joked "too bad you can't just write a check!" Both teams erupted in laughter but after a few minutes, one of the top Morgan Stanley executives made the astonishing declaration that a check actually might work! If Mitsubishi had the funds to cover a $9 billion check, there was no reason why Morgan Stanley couldn't accept and deposit it before the markets opened Tuesday morning. A check would also allow Morgan Stanley to officially announce the merger and hopefully reverse their deteriorating stock price. The Japanese team quickly left to call the home office and research their capabilities. A few hours later, the Mitsubishi bankers returned to Morgan Stanley's headquarters with what will likely go down in history as the biggest check ever written:
Astonished, Morgan Stanley immediately announced to the world that they had a done deal. On Tuesday, their stock surged 85% from $9.68 to $17.92. Clearly the deal came at the absolute last minute and saved the company from certain death. I wonder what it feels like to write or receive a check like that? Imagine filling out that deposit slip… So, does a $9 billion check blow your mind? Think someone will ever write you a check that large?