Morgan Stanley, the big Wall Street bank, saw its share price dive by more than 25% on the New York Stock Exchange last night as a ban on short-selling expired and concern grew that the company may be unable to survive the global credit crisis.

Banking analysts said the New York-based company has lost nearly 75% of its value this year.

Morgan Stanley transformed itself into the fifth-biggest bank-holding company and agreed to sell more than 20% to Japanese-based Mitsubishi UFJ Financial Group for $9bn (£5bn) in an effort to win the confidence of investors and clients.

The bankruptcy of Lehman Brothers Holdings last month, and the emergency sales of investment banks Merrill Lynch and Bear Stearns have raised concern that companies such as Morgan Stanley that depend on debt markets will run out of financing.

"The stock has been under (selling) pressure because the problems that affect other brokerage firms may also impact Morgan Stanley," said Frederic Ruffy, a senior strategist at WhatsTrading.com, a New York-based provider of options market analysis. "After the lift of the short-selling ban, the shorts are focused on this stock again."

Mark Lake, a spokesman for Morgan Stanley, said the deal with Mitsubishi is scheduled to close on Tuesday and "nothing has changed".