The TradeSports contract on whether Phil Purcell would be fired or resign as CEO of Morgan Stanley by June 30th was always overpriced, representing a great opportunity for traders who wanted to short it. It has been widely speculated that Purcell would be ousted in the latest battle to get Morgan back on the path to respectability.

The only problem was that the company required 75% of its Board to vote Purcell out, which equated to 10 of its 13 members. The presence of Purcell and two of his buddies (who found themselves there exclusively because of him) made it extremely unlikely he would be removed by mid-year. That would require each and every one of the remaining Board members to vote to boot him.

CNBC's Maria Bartiromo reported late Friday, after a report was first published in the Wall Street Journal, that a Board meeting would take place over the weekend in Chicago, sparking speculation that Purcell's reign was over. The TradeSport contract doubled in value to 50 cents in no time, yet another shorting opportunity.

Word came Sunday that rather than fire Purcell, the Board would change its bylaws to require only a simple majority, or 7 out of 13, to replace him as CEO. The contract tumbled 70% to 15 cents. It appears Purcell will get a chance to spin off the Discover credit card unit and try and bring the company back. If he continues to prove unsuccessful as a Chief Executive, you can bet it won't be very difficult to get 7 "yes" votes to force him out.

As for the stock, it's cheap at $52 and might fall back to the $49-$50 area on news that Purcell is staying put. Value investors should use any weakness to add shares. Very few scenarios will cause the situation to get much worse. Either Purcell starts doing his job, the company gets sold, or someone new comes in to lead Morgan in a new direction. Any and all of those options will increase shareholder value from here.