TaskUs falls ahead of holder vote, Morgan Stanley downgrade

TaskUS (NASDAQ:TASK) dropped 2.1% ahead of a shareholder vote on a take-private deal and after a Morgan Stanley downgrade. 

TaskUS was cut to equal-weight vs overweight by Morgan Stanley analyst James Faucette, who said the upside is largely priced in the stock and cut his price target to $16.50 from $21.

"We feel comfortable downgrading TASK to EW at $18, as we think recent price action already reflects the possibility that shares get bid up beyond the proposed $16.50," Faucette wrote in a note on Monday. 

The downgrade comes as shareholders are scheduled to vote on Wednesday on Blackstone's $16.50 a share deal to take TaskUS private. Proxy adviser ISS has said holders should reject the offer and some investors have also said they plan to reject the offer at its current price. 

Faucette sees the possibility that the majority of the minority of the Class A TuskUS (NASDAQ:TASK) votes against the deal, in which case TASK could remain a standalone company, or the buyer group may have the option to submit a revised bid no later than Dec. 10 or TASK could entertain other strategic offers. 

Blackstone (NYSE:BX), TaskUs (NASDAQ:TASK) Chief Executive Officer Bryce Maddock, and President Jaspar Weir agreed in May to take private the digital services provider in an all-cash transaction for $16.50 a share.