An outgrowth of the well-publicized management mess at Morgan Stanley might well be the sale of the troubled investment banking biggie, according to internal rumblings, as well as talk from former brass. In fact, efforts, spurred, in part, by some former Morgan Stanley officials, are already believed to be under way to promote a buyout of the firm.

This newest dimension to the Morgan Stanley saga comes on the heels of its latest management turmoil, namely last Wednesday’s resignations of bankers Joseph Parella and Tarek Abdel-Meguid, and ongoing efforts to oust CEO Philip Purcell.

Speculation on a potential buyer centers on London-based HSBC Holdings PLC, an international banking giant with more than 5,000 offices in 79 countries. Parties anxious to get HSBC involved in a deal with Morgan Stanley, it’s said, have already commenced efforts to push such a transaction.

Adding fuel to the fire is HSBC’s previous declaration that it wants to be an active participant in American merchant banking. An HSBC spokesman declined comment, but one of its top officials is reliably reported to have recently told a Goldman Sachs contact that “Morgan Stanley would certainly be of interest to us.”

It is believed that Mr. Perella, formerly vice-chairman and head of institutional securities at Morgan Stanley, who resigned from the firm last week, could be an active player in any possible buyout plan.

Mr. Perella could not be reached for comment, and Tim Metz, a spokesman for the one-time partner of the investment banking firm of Wasserstein & Parella, told me “we’re hiding him from the press.”

In a buyout – assuming one could be effected – Morgan Stanley could fetch between $70 and $75 a share, or around $70 billion to $75 billion, estimates one investment banker. The stock, which has traded over the past 52 weeks in a range of $40.54 on the low side and $60.51 on the high side, closed Friday at $51.49.

Last Thursday, Merrill Lynch added its voice to Wall Street’s worry-warts by downgrading Morgan Stanley shares to “neutral” from “buy.” Merrill noted the risk of a considerable brain drain exists, given the departure of some key people. A day later, Standard & Poor’s followed with a downgrading of the firm’s credit rating from stable to negative. It, too, cited continued concern over management departures.

It all leads some Street observers to conclude that Morgan Stanley’s board – which is under fire for sitting quietly on the sidelines and doing nothing to stem the management deterioration – will be forced to take some action sooner rather than later, which could include giving more than passing consideration to any possible takeover feelers.

Meanwhile, it’s no secret that some very recent speculative buying has occurred in Morgan Stanley securities on the theory that a takeover could be brewing.

Morgan Stanley officials could not be reached for comment over the weekend.

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THE WRONG RIDE: What now for the sputtering auto stocks, notably Ford and General Motors, each of which is down more than 30% this year? That’s what April Summer wants to know. In a recent e-mail, she wrote, “Dan, I bought 2,000 shares of Ford last year, the first thousand at around $17 a share and then another 1,000 at around $14.50. With the stock lower now, ($9.50), I’m thinking of averaging down and doubling my position. Is that what you would do? Also, how does GM look to you?”

Answer: April, a couple of auto analysts think Ford is a bad investment ride. As you may know, it recently lowered its 2005 earnings outlook, citing higher oil and steel prices and a more difficult pricing environment.

An analyst, Ron Tadross, of Banc of America, is also bothered by competitive pricing issues. Ford’s products to him look 10%-15% overpriced versus Japanese products, and even overpriced compared to General Motors, whose products he considers 10% overpriced relative to those of their Japanese rivals. Likewise, based on his analysis of Ford’s cash flow and EBITDA (earnings before interest, taxes, depreciation, and amortization), he has reduced his 12-month stock price target from $10 to $7 and recommends selling the shares.

Prudential Securities analyst Michael Bruynesteyn also takes a bleak view of Ford, whose earnings estimates he has cut to $1.33 a share this year and to $1.45 in 2006. He thinks investors should underweight the stock, and he has lowered his 12-month price target from $11 to $9.

Interestingly, though, Mr. Bruynesteyn upgraded GM on Friday from an underweight investment position to an overweight position. His reasoning: Current sentiment appears overly negative and GM’s 7.5% dividend yield – which he feels will not be cut – looks very attractive. He further thinks “bankruptcy is highly unlikely” and that plenty of assets could be monetized to meet obligations. He also believes a credit rating downgrade expected by the summer may prove an inflection point for GM shares, which closed Friday at $25.60, down more than 50% from their 52-week high of $54.

Money manager George Soros obviously disagrees with the analyst’s enthusiastic view. He’s understood to have a sizeable short position in GM (a bet its stock price will fall).

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A GOOF: In Friday’s column, I listed the top energy takeover picks of energy pro Alan Gaines. Omitted, he tells me, was Anadarko Petroleum ($71.66), whose takeover target price he estimates at $116 a share. It was incorrectly stated that Apache Corporation was also one of his favorite takeover targets.