Morgan Stanley was quick to dismiss suggestions its status as the king of initial public offerings for Silicon Valley was under threat because of the botched Facebook Inc IPO last month. And that confidence may warranted.

While Morgan Stanley has been snubbed by some technology companies, the repercussions for the Wall Street investment bank have been limited, according to sources familiar with the situation.

Just a week after the Facebook debut, Ruckus Wireless chose Goldman Sachs Group Inc over Morgan Stanley as the lead underwriter for its IPO, sources familiar with the matter said.

One of the sources said the company's decision had nothing to do with the social networking website's debacle, but a second said Facebook had at least some influence on the decision.

Ruckus, which supplies WiFi products to mobile operators, chose Goldman primarily because it liked the firm's banker and the pitch, the sources said. Morgan Stanley is now one of the bookrunners on the IPO.

Some companies and rivals have railed against Morgan Stanley's tendency to monopolise IPOs - a practice that is not uncommon on Wall Street.

The bank retained tight control over information, decisions and the allocation of Facebook shares, even though there were 33 bookrunners on the offering, other underwriters have said.

In fact, the bank has long argued it is right to do so, telling clients it offers them 'one throat to choke' if something goes wrong, sources familiar with the situation said.

But at least one client, Palo Alto Networks, which has hired Morgan Stanley as its lead bookrunner, is no longer buying into that argument.

The security software maker has asked its other underwriters, which include Goldman and Citigroup Inc, to be more active in its IPO, which is planned for later this summer, sources familiar with the company said. That will likely mean having more of a voice in book-building, as well as pricing discussions.

Palo Alto Networks' executives also expressed concern about the botched Facebook IPO, but Morgan Stanley remains the lead underwriter, the sources said.

Helping Morgan Stanley is a recognition that it won a large part of its mandate in the Facebook IPO by successfully raising $16 billion for the company and its early shareholders.

The bank and Facebook have been criticized for increasing the number of shares sold and the price range, while the company cut its outlook.

BLAME NASDAQ

However, it is Nasdaq OMX Group Inc that has been in the firing line for most for the technical glitches that led to a disastrous opening day, with many orders delayed and a number of market makers each losing tens of millions of dollars.

The confusion is being at least partially blamed for the subsequent decline of Facebook shares by as much as 33 percent, although they have regained more than half of those losses.

Another Morgan Stanley technology client, IT software maker GFI Software went so far as to think about removing the bank as the lead bookrunner on its IPO, according to sources close to the matter.

Morgan Stanley remains on the deal, but the other underwriters, including JPMorgan Chase & Co and Jefferies Group Inc, are playing an active role, the sources said. GFI is expected to file for the IPO with U.S. securities regulators shortly, they added.

Morgan Stanley bankers have often had to explain its handling of the Facebook IPO in discussions with clients, sources familiar with the situation said.

But years of relationship-building by technology banker Michael Grimes and others has given the bank a second chance in Silicon Valley after the disaster.

Morgan Stanley will get that chance as soon as this week, when business software company ServiceNow is expected to go public.

The company, which has kept Morgan Stanley as lead underwriter, will be the first technology public offering for the bank since Facebook.

Morgan Stanley, Citigroup and Goldman declined to comment, as did Ruckus Wireless, Palo Alto Networks and GFI Software.