Morgan Stanley, the second-largest shareholder in the New York Times has sold its 7% interest in the company.

Hassan Elmasry, managing director of Morgan Stanley Investment Management, unsuccessfully challenged the Sulzberger family’s control of New York Times Co. through super-voting stock that gives them a board majority. Shareholders owning 42 percent of the company, parent of the namesake newspaper and Boston Globe, withheld support for directors at the publisher’s April annual meeting.

“This guy has been speaking for a lot of people who are too discreet to speak up and challenge management,” said Porter Bibb, a managing partner at Mediatech Capital Partners LLC in New York and a former New York Times Co. executive.

New York Times shares slid 43 cents, or 2.3 percent, to $18.48 at 4:04 p.m. in New York Stock Exchange composite trading, the lowest since January 1997. The stock has declined 24 percent this year.

I wonder how much money the Sulzberger and Ochs families lost on this deal today. And their fortunes may be slipping further:

If Elmasry has sold the stock, “it’s almost a dead certainty there would be a bailout of other institutional holders,” Bibb said in an interview. “If that happens and there is a sharp drop in the share price, the Sulzbergers have to sit down and decide whether now is not a good time to take the company private.”

T. Rowe Price Group Inc., New York Times’ largest shareholder with a 14 percent stake, had no immediate comment, said spokesman Steve Norwitz. Morgan Stanley held 10.5 million New York Times shares, or a 7.3 percent stake, as of June 30, making the company the second-largest institutional investor.

If the NYT wishes to stack the board of directors so none of the shareholders actually have a say in how the company is run (and rumor has it it’s not run very well under Pinch Sulzberger) then perhaps the best thing is for them to go private.

They are about to get some expected stiff competition from Rupert Murdoch once he closes the deal on the Wall Street Journal.

If that happens it will be nice to see more than just the liberal voice in our newspapers but a little bit of something conservative or at least balanced.