|Bid||216.00 x 900|
|Ask||218.09 x 800|
|Day's Range||216.32 - 219.33|
|52 Week Range||151.70 - 238.52|
|Beta (3Y Monthly)||1.35|
|PE Ratio (TTM)||9.10|
|Earnings Date||Oct 15, 2019|
|Forward Dividend & Yield||5.00 (2.27%)|
|1y Target Est||235.81|
Advisers for the New York-based property company had tested appetite for the IPO at a valuation as low as $15bn, a sharp reduction from the $47bn WeWork attained during its last private fundraising. The company has nonetheless been under pressure, with Mr Neumann giving advisers at JPMorgan Chase and Goldman Sachs until the end of September to finalise the listing, which was expected to raise between $3bn and $4bn.
WeWork owner The We Company said on Monday it expected to complete its initial public offering (IPO) by the end of the year, after walking away from preparations earlier in the day to proceed with it stock market debut this month. The U.S. office-sharing startup was getting ready to launch an investor road show for its IPO this week before making a last-minute decision on Monday to stand down, because of concerns not enough stock market investors would participate, people familiar with the matter said. In the run-up to the launch of its IPO, We Company has faced concerns about its corporate governance standards, as well as the sustainability of its business model, which relies on a mix of long-term liabilities and short-term revenue, and how such a model would weather an economic downturn.
(Bloomberg) -- Oil surged the most on record after a devastating attack on Saudi Arabia intensified concerns about growing instability in the world’s most important crude-producing region.In an extraordinary start to the week’s trading, Brent futures in London leaped a record $12 a barrel in early trading Monday, before settling just above $69 for the biggest one-day percentage gain since the contract began trading in 1988. Prices may remain elevated after Saudi officials downplayed prospects for a rapid recovery of production capacity.Saudi Aramco faces weeks or months before most output from its giant Abqaiq crude-processing complex is restored, according to people familiar with matter. Saudi Arabia’s Foreign Ministry said Iranian weapons were used in the attacks on Saudi Aramco, while the U.S. blamed Iran for the attacks.For oil markets, it’s the worst sudden supply disruption ever. The attacks that damaged a key processing complex and one of the Saudi’s marquee fields highlight the vulnerability of the world’s biggest exporter. The crisis also means a “new geopolitical premium” of about $5 a barrel, Mizuho Securities USA’s Paul Sankey wrote in a note.“We have never seen a supply disruption and price response like this in the oil market,” said Saul Kavonic, an energy analyst at Credit Suisse Group AG. “Political-risk premiums are now back on the oil-market agenda.”Meanwhile, U.S. Energy Secretary Rick Perry told CNBC that a “coalition effort” will be needed to counter Iran, which the Trump administration said was behind the attacks.Haven assets including gold and U.S. government debt surged as investors fled riskier instruments. Currencies of commodity-linked nations including the Norwegian krone and the Canadian dollar also advanced. U.S. gasoline futures jumped 13%.State-run producer Saudi Aramco lost about 5.7 million barrels a day of output on Saturday after 10 unmanned aerial vehicles struck the Abqaiq facility and the kingdom’s second-largest oil field in Khurais. A Saudi military official earlier said preliminary findings showed that Iranian weapons were used in the attacks but stopped short from directly blaming the Islamic Republic for the strikes.The disruption surpasses the loss of Kuwaiti and Iraqi petroleum output in August 1990, when Saddam Hussein invaded his neighbor. It also exceeds the loss of Iranian oil production in 1979 during the Islamic Revolution, according to the International Energy Agency.“The vulnerability of Saudi infrastructure to attacks, historically seen as a stable source of crude to the market, is a new paradigm the market will need to deal with,” said Virendra Chauhan, a Singapore-based analyst at industry consultant Energy Aspects Ltd. “At present, it is not known how long crude will be offline for.”Aramco officials are growing less optimistic that there will be a rapid recovery in production, a person with knowledge of the matter said. The kingdom -- or its customers -- may use stockpiles to keep supplies flowing in the short term. Aramco could consider declaring itself unable to fulfill contracts on some international shipments -- known as force majeure -- if the resumption of full capacity at Abqaiq takes weeks. Alternatively, the kingdom’s own refineries may cut runs just to keep crude exports flowing, according to analysts with JBC and Energy Aspects.Declaring force majeure would rattle oil markets further and cast a shadow on Aramco’s preparations for what could be the world’s biggest initial public offering. It’s also set to escalate a showdown pitting Saudi Arabia and the U.S. against Iran, which backs proxy groups in Yemen, Syria and Lebanon. Iran-backed Houthi rebels in Yemen claimed credit for the attack, but U.S. President Donald Trump and Secretary of State Mike Pompeo have already blamed Iran.Trump Vows U.S. ‘Locked and Loaded’ If Iran Was Behind AttacksTrump, who said the U.S. is “locked and loaded depending on verification” that Iran staged the attack, earlier authorized the release of oil from the nation’s emergency reserves. The IEA, which helps coordinate industrialized countries’ emergency fuel stockpiles, said it was monitoring the situation.Brent for November settlement rose 15% to $69.02 on ICE Futures Europe. The global benchmark could rise above $75 a barrel if the outage at Abqaiq lasts more than six weeks, Goldman Sachs Group Inc. said.On the New York Mercantile Exchange, West Texas Intermediate futures for October delivery settled up 15% at $62.90, the highest close since May 21. Brent’s premium to WTI for the same month closed at $6.35 a barrel. Volume for both Brent and WTI hit record highs, according to the exchanges.The drama wasn’t limited to flat prices. The spread between Brent and WTI widened as much as 37%, showing that the oil spike will affect global prices more than those in the U.S., where shale output and ample supplies provide more of a buffer.\--With assistance from Nayla Razzouk, Javier Blas, Anthony DiPaola, Michael Roschnotti, Tina Davis, Serene Cheong, Dan Murtaugh, Stephen Stapczynski, Ramsey Al-Rikabi, Saket Sundria, Ann Koh, Andrew Janes, Heesu Lee, Sarah Chen, Sharon Cho and Ben Sharples.To contact the reporter on this story: Sheela Tobben in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: David Marino at email@example.com, Joe Carroll, Mike JeffersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The message to Adam Neumann was clear: You’re not Zuckerberg.Over the past month, as Neumann’s grandiose plans for We Co. started to fray, bankers began warning that he would have to loosen his iron grip on the company.The old era of Mark Zuckerburg was over, WeWork executives would soon learn. Back in 2012, Zuckerberg could take Facebook Inc. public and still retain extraordinary voting power. But that was then.And so it was that Neumann, the polarizing co-founder of WeWork, begrudgingly agreed this week to cede some of his powers. The question now: Will that be enough? Already, WeWork’s hoped-for valuation has plunged by more than half, or some $30 billion.By Friday morning, Neumann’s company had hastily filed an amended prospectus for an initial public offering -- one that will test not only WeWork and its guru-CEO but, in many ways, an entire generation of money-burning, grow-at-all-cost startups.In a matter of weeks, WeWork’s IPO has gone from one of the most hotly anticipated deals of the decade to perhaps one of the most dreaded. Despite growing skepticism over WeWork’s business prospects, Neumann has resisted corporate-governance changes that would be considered standard elsewhere.The chaos was apparent Thursday and Friday, as WeWork picked a stock exchange, emailed bankers and filed its new prospectus -- all in about 12 hours.Nasdaq ListingDefying skeptics -- among them, some of its own financial backers -- WeWork is plowing ahead with plans to go public on the Nasdaq stock market. Not even Nasdaq officials knew for certain that the company would chose the exchange until the last minute on Thursday, according to people familiar with the matter.Emails were flying into the night. The new prospectus hit just after 6 a.m. on Friday.Now, yet another deadline looms: September 27, the Friday before Rosh Hashanah, the Jewish New Year. Neumann is expected to observe the holiday and be out of communication for several days, people familiar with WeWork said. WeWork representatives did not respond to a request for comment.Neumann didn’t get where he is, atop one of the most talked-about startups of the decade, by sharing. But in a new prospectus WeWork disclosed that Neumann would wield less power via an unusual class of high-voting stock.Now, executives must persuade investors that their company -- which has raised $12 billion since its founding and never turned a nickel of profit -- is worth billions on the stock market. As of late Friday, it was unclear whether they would be able to start marketing the stock via a roadshow starting on Monday, as many had expected.$65 Billion Value?Unclear, too, is just what WeWork might fetch on the open market. Only months ago, some bankers whispered it might be worth as much as $65 billion. Now that figure has fallen to as little as $15 billion.Beyond a page or so of steps WeWork would take to tighten up its corporate governance practices, Friday’s amended prospectus was little changed from the initial one in August.The dedication, even the second time, is pure Neumann:TO THE ENERGY OF WE –GREATER THAN ANY ONE OF USBUT INSIDE EACH OF USAmong other things, the company will trim the voting advantage that gives Neumann sway over the board, and no member of his family will be allowed to sit on the board. WeWork will also announce a lead independent director by year’s end.The move leaves in place a rare three-class stock structure and Neumann still maintains a voting majority, so it’s unclear how much the changes will appease both investors and the banks in charge of managing WeWork’s IPO.Valuation QuestionsQuestions remain about how investors will value the fast-growing, money-losing office leasing business that’s backed by SoftBank Group Corp. Both of the company’s lead financial advisers --JPMorgan Chase & Co. and Goldman Sachs Group Inc. -- have previously voiced concerns about proceeding with an IPO at a valuation around $15 billion, people briefed on the discussions have said.Looking to save the IPO and limit its downside, SoftBank is in discussions to buy about $750 million worth of additional stock in the offering, the people said.The board will have the ability to remove the CEO, and the updated prospectus has taken out a clause that previously said Neumann’s wife Rebekah -- who’s listed as a founder and chief brand and impact officer of WeWork -- will have a role choosing any new chief. Some criticized the changes as not going far enough.“This is an example of posturing,” Jeffrey Cunningham, who teaches management at Arizona State University and has served on several corporate boards, said of WeWork’s changes. The company appears to be facing pressure “to go public at a time that is inappropriate and with a governance record that is questionable.”Still, the moves drove WeWork bonds to be the biggest price gainers in high-yield bond trading for part of Friday. A Fitch Ratings analyst said the changes addressed many of the issues that the ratings company raised in downgrading WeWork’s credit grade last month.“A key component of WeWork’s model is the ability to restrain growth in the event of a downturn and these governance changes increase the likelihood that an independent board will have the power to enforce such a decision,” Kevin McNeil, a director at Fitch, said in an emailed statement.(Corrects the size of the drop in WeWork’s hoped-for valuation in fourth paragraph)\--With assistance from Michelle F. Davis, Anders Melin, Tom Giles and Crystal Tse.To contact the reporter on this story: Gillian Tan in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Liana Baker at email@example.com, ;Michael J. Moore at firstname.lastname@example.org, David GillenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Associate Stock Strategist Ben Rains dives into Apple's (AAPL) new iPhone 11s, as well as its streaming TV service and video game push. The episode also breaks down what's next for Apple stock and why the tech firm looks strong heading into the holiday shopping season. - Full-Court Finance
Morgan Stanley ranked as the top financial adviser in activist campaigns during the first six months of 2019 while Goldman Sachs and Spotlight Advisors each added clients and tied for second place, according to Refinitiv data. Holding onto the No. 1 spot, Morgan Stanley advised 19 companies, including Bristol-Myers Squibb Co and United Technologies Corp, in the first half of 2019. A year ago, when activists launched more campaigns overall, Morgan Stanley counseled 23 companies in the first six months of 2018.
U.S. equities seem ready to push higher with a number of key large-cap stocks perking up on evidence the American consumer is hanging tough. Of course, there continues to be lingering hopes of a thaw in U.S.-China trade relations as well. * 7 Tech Stocks You Should Avoid Now As a result, a number of Dow Jones Industrial Average components are perking up nicely and look good for new money. Here are seven to watch:InvestorPlace - Stock Market News, Stock Advice & Trading Tips JPMorgan Chase (JPM)Shares of Dow component JPMorgan (NYSE:JPM) are blasting to fresh highs today, pushing towards the $120 level with a move above its April and July highs. This puts an end to a two-year consolidation range going back to early 2018.The company will next report results on Oct. 15 before the bell. JPM stock analysts are looking for earnings of $2.44 per share on revenues of $28.14 billion. Boeing (BA)Boeing (NYSE:BA) shares are gaining some altitude and look ready for a breakout from their long post-737 MAX malaise as its engineering team rapidly work towards getting the plane re-certified and back in the air by the end of the year. * 7 Discount Retail Stocks to Buy for a Recession BA stock shares have been in a sideways pattern since early 2018, so watch at the least for a retest of the early 2019 highs. The company will next report results on Oct. 23. Analysts are looking for earnings of $2.24 per share on revenues of $20.8 billion. Caterpillar (CAT)Caterpillar (NYSE:CAT) shares are pushing back towards the upper end of its down channel resistance going back two years. A breakout here would set the stage for a run at the early 2018 highs near $165, which would be worth a gain of more than 20% from here.Dow member CAT stock will next report results on Oct. 23 before the bell. Analysts are looking for earnings of $2.95 per share on revenues of $13.6 billion. DuPont de Nemours (DD)Shares of DuPont (NYSE:DD) look ready for a break above its 200-day moving average, threatening an end to a two-year downtrend channel on the Dow Jones Industrial Average. Look for a rebound to the April high, which would be worth a gain of nearly 15% from here. * 10 Battered Tech Stocks to Buy Now The company will next report results on Oct. 31, before the bell. DuPont stock analysts are looking for earnings of 96 cents per share on revenues of $5.5 billion. Goldman Sachs (GS)Goldman (NYSE:GS) shares are rising to fresh highs as excitement builds around the company's co-branded credit card with Apple (NASDAQ:AAPL) -- a slick unit with functionality integrated into the iPhone that includes a physical card built out of titanium. This is the type of innovation Apple CEO Tim Cook loves, given his training as an accountant.The company will next report results on Oct. 15 before the bell. GS stock analysts are looking for earnings of $5.63 per share on revenues of $8.7 billion. Nike (NKE)Nike (NYSE:NKE) shares are preparing to break up and out of a sideways consolidation range going back to March thanks to repeated bounces off of its 200-day moving average. Nike stock will benefit from the fresh tailwinds being enjoyed by the U.S. consumer thanks to a strong job market. * 10 Recession-Resistant Services Stocks to Buy NKE will next report results on Sept. 24 after the close. Analysts are looking for earnings of 71 cents per share on revenuers of $10.4 billion. Walmart (WMT)Walmart (NYSE:WMT) shares are also pushing to fresh highs, extending a bounce off of its 50-day moving average on the Dow. Morgan Stanley recently raised their price target on WMT stock on its PhonePe financial services play.The company will next report results on Nov. 14 before the bell. Analysts are looking for earnings of $1.09 per share on revenues of $127.8 billion.As of this writing, William Roth did not hold any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Recession-Resistant Services Stocks to Buy * 7 Hot Penny Stocks to Consider Now * 7 Tech Stocks You Should Avoid Now The post 7 Dow Titans Breaking Higher appeared first on InvestorPlace.
Goldman Sachs Group Inc announced on Monday that Chief Risk Officer Robin Vince would retire at the end of the year, according to an internal memo viewed by Reuters. Vince has been the firm's head of risk since 2017 and was responsible "for setting the firm’s overall risk management standards," according to the memo signed by Goldman's Chief Executive Officer David Solomon and others.
The Goldman Sachs Group, Inc. (NYSE:GS) saw a double-digit share price rise of over 10% in the past couple of months...
“When institutional money?” was the cry of retail investors through 2018, as crypto assets sagged and hopes of salvation faded. Institutions have since entered the space, and began to take up positions in bitcoin and other leading assets, but it would be exaggerating to say there’s been a stampede from the direction of Wall Street. […]
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
The departure of Goldman Sachs' chief risk officer is the latest move by CEO David Solomon, who has been shaking up investment bank's top ranks since he took over nearly a year ago.
Evercore's (EVR) strong balance sheet position and robust fundamentals are key positives. However, rising expenses deter bottom-line growth.
(Bloomberg) -- Andre Esteves once joked that Banco BTG Pactual SA, the Latin American investment bank powerhouse he helped create, would one day become “better than Goldman” -- a play on the firm’s name.Now, BTG is chasing Goldman Sachs Group Inc. down another path, looking to build a digital retail bank for the masses.The firm, under the BTG Digital brand, will offer credit and debit cards, checking accounts and loans to individuals by mid-next year, adding to the investment platform focused on high-income clients, Chief Executive Officer Roberto Sallouti said in an interview at the bank’s Sao Paulo headquarters. The plan remains on track after a new round of police investigations targeted the bank in August.“Being a latecomer in this case is a benefit,” Sallouti said, adding that not having branches or old technology allows BTG to offer new products and better service. His five-year goal is to gain a 10% stake in the holdings of retail and private-banking clients, which totaled 2.8 trillion reais ($690 billion) last year.Years after the global financial crisis, Goldman’s then-CEO Lloyd Blankfein set out to build an online bank called Marcus to help diversify his firm’s funding and sources of revenue. The idea is to offer personal loans and savings accounts online at better rates than brick-and-mortar competitors -- helping consumers save money while disrupting incumbents.“The Brazilian middle class has now access to the same products millionaires have and at the same prices,” Sallouti said.Both BTG and Goldman have learned the benefits of drawing low-cost, diversified funding from individuals. That was one of the takeaways of the 2008 financial crisis for New York-based Goldman.For BTG, the lesson came later, in a 2015 crisis when Esteves, 51, was arrested in a probe known as Carwash, sparking withdrawals from big clients. Esteves was ultimately acquitted of all charges, with the prosecutor’s office saying there was “no sufficient proof” against him.See also: BTG in turmoil anew as Esteves is circled by police againThen in August, police searched the firm’s offices and Esteves’s home once again, sending shares tumbling and prompting the bank to react quickly to reassure investors that panic wasn’t warranted. Even after falling more than 20% from from their peak, BTG shares have more than doubled this year and are the second-best performer of Brazil’s benchmark Ibovespa index.BTG Digital has already helped retail deposits jump from 3% to near 17%, bringing a “brutal change in the quality of our funding,” Sallouti said. Once again, there’s a parallel with Goldman Sachs, which said it expected to increase consumer deposits by more than $10 billion a year with Marcus.BTG started its digital initiative in 2016 with a product similar to the one by XP Investimentos SA, which was offering middle-class clients deposits, bonds and stocks at lower fees. While BTG doesn’t disclose such details, Santander analysts Henrique Navarro and Olavo Arthuzo estimated in an Aug. 21 report that the digital unit would have 150 billion reais in assets under custody in three to five years, valuing the venture at around 18.7 billion reais.Sallouti expects the digital platform to break even by mid-2020. Alongside all the new retail banking features, the bank’s digital push includes a new small and mid-size firm lending business, a data-analytics firm, an insurance platform and Banco Pan SA, a smaller lender BTG has a stake in that serves low-income individuals.Fintech firms have multiplied in Brazil, attracting money from the likes of billionaire Warren Buffett, SoftBank and Goldman itself. The newcomers hope to challenge the dominance of the nation’s top five lenders, which hold 85% of total assets compared with 43% in the U.S. Leading the pack are Tencent-backed Nubank, a $10 billion digital bank with more than 10 million users, payments company StoneCo, and XP Investimentos.“We’re moving forward in a way I never thought would be possible for BTG, talking to a client that was once out of our reach,” Sallouti said.Another sign of change? A recent roadshow presentation by BTG included not only the usual financials like ROE or FICC revenues -- but also a chart on the growing number of the bank’s Instagram and YouTube followers.To contact the authors of this story: Felipe Marques in Sao Paulo at email@example.comCristiane Lucchesi in Sao Paulo at firstname.lastname@example.orgTo contact the editor responsible for this story: Michael J Moore at email@example.com, Dan ReichlDavid ScheerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- PJT Partners Inc. has hired Bank of America Corp. dealmaker Antonin Baladi to build up its European technology, media and telecommunications investment banking business, people familiar with the matter said.The London-based banker is joining PJT in a senior role, the people said, asking not to be identified because the information is private. Baladi, who was Bank of America’s head of media and internet investment banking for Europe, the Middle East and Africa, had been with the firm since 2010, according to his LinkedIn profile.Representatives for Bank of America and New York-based PJT declined to comment.PJT’s founder Paul J. Taubman has long been one of Wall Street’s top telecom and media dealmakers and has been on a hiring spree since taking his boutique advisory firm public in 2015. He has added several health care-focused partners, poached a top initial public offerings banker from UBS Group AG and last year hired David Perdue from Goldman Sachs Group Inc. to work on private equity deals.Taubman, 58, told analysts in July the firm feels “very positive” about its European franchise and is expanding its footprint in the region as it wins mandates in more industries and geographies. The number of strategic advisory partners at PJT globally will increase by five in the third quarter, including a partner who will focus on cross-divisional initiatives, Taubman said at the time.Below the partner level, PJT has hired more than 30 advisory professionals this year, he said. Global companies listed in the U.K. are attracting strategic takeover interest despite a challenging macroeconomic backdrop, and private equity activity is expected to rise in Europe given dislocations in stock prices, according to Taubman.PJT ranks eighth among advisers on U.S. mergers and acquisitions this year with an 11.1% market share, up from 12th place for all of 2018. In Europe, it ranks 29th this year with a 1.5% market share, according to data compiled by Bloomberg. Its largest deal to date in the region was its work with the independent board committee of Sky Plc on the U.K. satellite broadcaster’s takeover by Comcast Corp. last year.Shares of PJT shares have risen 14% in U.S. trading this year, outpacing rival Moelis & Co. but trailing Evercore Inc.’s 17% gain.To contact the reporters on this story: Dinesh Nair in London at firstname.lastname@example.org;Myriam Balezou in London at email@example.comTo contact the editors responsible for this story: Ben Scent at firstname.lastname@example.org, Amy ThomsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Goldman Sachs Group Inc. Chief Executive Officer David Solomon was paid $23 million last year, a third of what his predecessor received in 2007. Other Goldman employees haven’t fared much better.Compensation per employee is down by 61% at the Wall Street firm when adjusted for nominal wage growth in the period, according to company filings and calculations by Bloomberg. Goldman had the sharpest pay decline among a dozen of the largest U.S. and European banks, followed by Credit Suisse Group AG at 46%. The group had an average reduction of 14%.Thanks in part to tax cuts and strong consumer spending, the biggest U.S. banks are more profitable than ever, and European lenders are recovering. That hasn’t translated, however, into better pay for traders and investment bankers. And financial companies joining the shift to automation that’s also reshaping other industries may mean the pre-crisis period will forever be the high water mark for outsize salaries in banking.Pay cuts have been most dramatic at relatively small Wall Street firms that focus on investment banking, securities trading and wealth management and lack the large retail operations of rivals. It’s not only the bonuses that have declined since the 2008 crisis, but falling compensation reflects a shift from risky trading to consumer banking and wealth management. Banks also have raced to adopt high-end technology, changing their mix of employees in the process.“Business has transformed over the past decade,” said Richard Lipstein, managing director in the financial-services practice at recruiting firm Gilbert Tweed International. “Traders have been the worst hit as trading isn’t what it used to be. Now jobs are in technology and retail. You may add more employees, but those are not as high-paying as traders.”Goldman Sachs, once the symbol of cutthroat trading, has ventured into consumer services, credit cards and transaction banking. Credit Suisse has focused more on wealth management, while moving support functions to lower-cost locations like Poland and India to cut costs.A 36% drop in compensation at Deutsche Bank AG when adjusted for rising European wages was partly due to the 2010 acquisition of domestic retail bank Deutsche Postbank AG and the addition of 20,000 tellers, mortgage bankers and other lower-paid personnel. Deutsche Bank’s traders and bankers, once highly compensated, have seen their pay diminish over the past 12 years as well. The pay calculations take into account the nominal wage increase for the region where each bank is headquartered, which ranged from 17% to 30%.An equities dealer who joined the company just before the financial crisis said his total compensation was about half of what it was in 2007 by the time he left at the end of last year, before Deutsche Bank announced it would close the division. The dealer asked not to be identified to avoid hurting his relationship with his current employer.Cut in HalfHis experience reflects the typical fate of sales and trading staff on Wall Street, according to Julian Bell, a managing director at Sheffield Haworth, a recruitment firm specializing in banks. Average compensation for mid-level employees in that business has been cut in half, to a range of $400,000 to $800,000, data compiled by Sheffield Haworth show.Investment bankers had their pay reduced by about a third, with a mid-level banker now getting $600,000 to $950,000, Bell said. Compensation for managing directors has fallen roughly 30%, to an average of $1.5 million to $2 million.“There’s still fierce competition for investment bankers because the advisory boutiques have grabbed a lot of market share and can hijack top talent from the big banks,” said Bell, who heads the investment-banking practice. “So the full-service banks still have to pay more than they’d like to for their bankers. The same isn’t true for traders as trading revenue and profitability have shrunk and you still need big balance sheets to be successful.”Cash BonusesAnother change since the crisis is in the makeup of compensation. Big earners used to get relatively small salaries and much larger cash bonuses. Salaries have gone up, while cash bonuses have shrunk. The European Union even passed legislation that restricted the size of a banker’s bonus relative to salary. And bonuses in Europe and the U.S. are now mostly in the form of deferred stock awards, with the aim of aligning an employee’s long-term interests with the well-being of his or her firm.At Goldman Sachs, the $27 million cash bonus accounted for almost half of the CEO’s compensation in 2007. Last year, it was $5.7 million, or about a quarter. Deferred compensation also prevents top earners from leaving easily.“I’m forever talking to bank executives who want to get out, but they can’t walk away from their stock that hasn’t vested,” said John Burr, managing partner at executive-search firm Westcott Black Partners. “And other financial firms are looking to hire talent from the banks, but they balk at buying senior people’s deferred comp.”At a few of the largest banks, per-worker compensation has risen in the past decade, with the biggest increases at Bank of America Corp. and Barclays Plc. Barclays has been shrinking its retail footprint globally, including a 2017 exit from Africa that eliminated 40,000 lower-paid positions. Also, the British pound’s 20% decline against the dollar and several other currencies over the past 10 years has increased payroll costs in the U.S. and Asia, which account for more than a third of the bank’s headcount.Bank of America closed more than 1,000 branches around the U.S. and cut some 80,000 jobs after the crisis. It’s also reduced back-office jobs that could be replaced with technology, while hiring pricier client-facing employees, contributing to higher per-employee compensation. And Bank of America gave employees special bonuses following the Trump administration’s corporate-tax cut, and increased its minimum hourly pay.Wells Fargo & Co., which is focused mostly on consumer banking and has a relatively small investment-banking arm, has been adding compliance staff after a series of scandals related to the handling of its customers in recent years. Those positions are higher-paid than tellers or other branch personnel.“Retail banking still requires a local presence,” said Jeanne Branthover, managing partner at recruitment firm DHR International. “People still like to go to the branch, so the banks still have tellers and wealth managers in branches, and some banks are expanding again. Pay was never as significant for the branch staff, but it’s been holding up too, rising along with average wages.”To contact the reporter on this story: Yalman Onaran in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Daniel Taub, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Goldman Sachs Group Inc. is throwing everything but the kitchen sink at boosting its share of the $4 trillion U.S. market for exchange-traded funds -- even mimicking one of its Wall Street foes.The bank is adopting an approach pioneered by JPMorgan Chase & Co., filing for a line of broad-based index products that could start trading at rock-bottom prices as early as next week, regulatory records show.After getting off to a blistering start four years ago on the back of a dirt-cheap factor ETF, Goldman dropped behind its Wall Street competitor, which has ridden a strategy dubbed “bring your own assets” to a $29 billion business.Essentially cloning popular ETFs and moving client cash from those products into its own, the controversial approach may be Wall Street’s best hope for challenging the dominance of State Street Corp., BlackRock Inc. and Vanguard Group.“As we continue to grow and build out our ETF business, along with our recent acquisitions, it just makes sense in some areas for us to have the building blocks that fuel those portfolios,” said Steve Sachs, head of capital markets for ETFs at Goldman.Even before this latest chapter, the race between the Wall Street giants had enough twists and turns to power a thriller.Goldman emerged in 2015, establishing itself as a leader in factor investing with its ActiveBeta U.S. Large Cap Equity fund, ticker GSLC. The product wowed the ETF industry with a fee of just 9 basis points, unheard-of for smart beta strategies -- but newer ventures have stumbled. This year, it introduced a handful of thematic strategies, but they’ve collected less than $50 million.JPMorgan was relatively quiet until June 2018, when it kickstarted its business with a suite of vanilla ETFs called BetaBuilders. Unlike the more specialized products the bank was hawking up until then, the funds tracked broad developed-market benchmarks -- at thrift-store prices.It was an inspired play, tripling JPMorgan’s ETF assets to near $30 billion within a 14-month span and powering it ahead of Goldman.“JPMorgan saw this as a smart move ahead of anyone,” said Bloomberg Intelligence analyst Eric Balchunas. “We’ve seen how hard it is to get any assets. But bringing your own assets gets you mojo, and mojo gets people in the door and investors on the phone.”The bank made smart moves elsewhere, winning a foothold in the nascent but growing fixed-income ETF market, and planting a flag early in Europe, whose industry is around half the size of the U.S. but growing rapidly.Goldman has yet to list an ETF in the region despite some high-profile hires, though it plans to commence the business before year-end, a spokesman in London said. That puts it several years behind JPMorgan, which has $2.8 billion in assets there.Now Goldman hopes to turn the tables on its investment-banking rival by embracing the bring-your-own-assets strategy. The firm already has some experience in the area as the largest owner of GSLC, and its latest foray is fueled by a recent acquisition spree. The bank scooped up S&P’s model portfolio business and United Capital this year, giving it fresh pipelines for flows into its own funds.However, the approach isn’t without its critics, who argue there are conflicts in directing wealthy clients to a bank’s own ETFs.“We have internal affiliates in our products, but they are institutional clients and we treat them as such with their own due diligence,” said Jillian DelSignore, head of ETF distribution for JPMorgan’s asset management arm.The bank’s transfers into BetaBuilders have saved clients about $42 million a year thanks to their low price tag, according to an analysis by Bloomberg Intelligence.Ironically, if Goldman succeeds in moving wealthy clients to its in-house products, BlackRock may turn out to be the biggest loser, according to an analysis of regulatory filings.United Capital’s clients hold some $4 billion in the firm’s iShares line, which could be redeployed into Goldman’s new products. That’s especially true if the funds are cheap.“The advisers -- by being so brutal with cost obsession -- have created this monster of cost migration,” said Balchunas. “By making moves like this, the banks are able to own the end client and the flows. It’s brutal out there.”\--With assistance from Morgan Tarrant.To contact the reporters on this story: Carolina Wilson in New York City at email@example.com;Ksenia Galouchko in London at firstname.lastname@example.org;Elizabeth Rembert in New York at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, Yakob Peterseil, Rachel EvansFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- WeWork is pressing ahead with plans for a public listing, announcing a series of governance changes aimed at shoring up a sagging valuation and assuaging critics who say it gave too much power to a polarizing co-founder.The company will trim the voting advantage that gives chief executive officer Adam Neumann sway over the board, and no member of his family will be allowed to sit on the board, it said in a regulatory filing Friday. WeWork will also announce a lead independent director by year’s end.The moves aim to give potential investors a check on Neumann’s control of the company and address some of the most unusual dealings between founder and firm. But it left in place a rare three-class stock structure and Neumann still maintains a voting majority, so it’s unclear how much the changes will appease both investors and the banks in charge of managing WeWork’s IPO.Questions remain about how investors will value the fast-growing, money-losing office leasing business that’s backed by SoftBank. Both of the company’s lead financial advisers -- JPMorgan Chase & Co. and Goldman Sachs Group Inc. -- have previously voiced concerns about proceeding with an IPO at a valuation around $15 billion, people briefed on the discussions have said.The company and its advisers were discussing a valuation range of $15 billion to $20 billion Friday, people with knowledge of the talks said. SoftBank Group Corp., which with its affiliates is WeWork’s biggest backer with a 29% collective stake and invested in January at a valuation of $47 billion, is in discussions to buy about $750 million worth of additional stock in the offering, the people said. The company has been looking to raise at least $3 billion in the IPO, and SoftBank’s purchase would limit its dilution.Spokespeople for SoftBank and WeWork declined to comment. The Wall Street Journal reported SoftBank’s plans earlier Friday.The company plans to start its IPO roadshow as soon as Monday, though that timeline could be delayed depending on investor demand, said a person with knowledge of the matter. WeWork said Friday it picked Nasdaq as its listing venue.The new filing revealed that Neumann will return any profits he receives from the real estate transactions he has entered into with the company, and that any CEO who succeeds Neumann will be selected by board of directors.The board will have the ability to remove the CEO, and the updated prospectus has taken out a clause that previously said Neumann’s wife Rebekah -- who’s listed as a founder and chief brand and impact officer of WeWork -- will have a role choosing any new chief. Some criticized the changes as not going far enough.“This is an example of posturing,” Jeffrey Cunningham, who teaches management at Arizona State University and has served on several corporate boards, said of WeWork’s changes. The company appears to be facing pressure “to go public at a time that is inappropriate and with a governance record that is questionable.”Still, the moves drove WeWork bonds to be the biggest price gainers in high-yield bond trading for part of Friday. A Fitch Ratings analyst said the changes addressed many of the issues that the ratings company raised in downgrading WeWork’s credit grade last month.“A key component of WeWork’s model is the ability to restrain growth in the event of a downturn and these governance changes increase the likelihood that an independent board will have the power to enforce such a decision," Kevin McNeil, a director at Fitch, said in an emailed statement.WeWork, which leases and owns spaces in office buildings and then rents desks to businesses ranging from startups to large corporations, has raised more than $12 billion since its founding nine years ago and has never turned a profit.WeWork had been targeting a share sale of about $3.5 billion in September, people familiar with the matter said in July. A listing of that size would be second only to Uber Technologies Inc.’s $8.1 billion listing this year.After the company filed publicly for the offering in August, its valuation shrank amid investor scrutiny.WeWork has been driving ahead with its desire to IPO, in part to gain access to much needed capital. The company needs to raise at least $3 billion through an IPO to tap into an additional $6 billion credit line that bankers have been setting up in recent weeks. The facility requires the company to carry out its offering by Dec. 31, the people said.Share ClassesThe original IPO plan included three classes of common stock, with holders of Class A shares getting one vote per share, while Class B and Class C owners got 20 votes for each. This arrangement would have given Neumann the vast majority of the voting power.The company is changing its high-vote stock from 20 votes to 10 votes a share. But it’s keeping the different classes, which it says “may result in a lower or more volatile market price” of its Class A common stock in part because certain indices like the S&P 500 exclude companies with such structures.The high-vote stock will automatically decrease to one vote per share in the event that Neumann becomes permanently incapacitated or dies, something that would previously only have occurred if Neumann’s ownership fell to 5% or lower.The company already has taken some steps to improve its governance, such as adding a woman to its board and having Neumann return $5.9 million of partnership interests initially granted to him as compensation for trademarks used in a rebranding. Yet its IPO filing last month raised a variety of other concerns. Among them: The company paid Neumann rent and lent him money.Neumann will also limit his ability to sell stock in each of the second and third years following this offering to no more than 10% of his shareholdings. WeWork’s Class A stock has been approved for listing on Nasdaq under symbol “WE”.The New York-based company, which changed its name to the We Co. this year, disclosed in its filings that it had lost $2.9 billion in the past three years and $690 million in just the first six months of 2019. Its annual revenue, though, had more than doubled to $1.8 billion in 2018, compared with $886 million the previous year.(Adds latest valuation talks in fifth paragraph.)\--With assistance from Anders Melin, Tom Giles and Sarah McBride.To contact the reporters on this story: Gillian Tan in New York at email@example.com;Giles Turner in London at firstname.lastname@example.org;Michelle F. Davis in New York at email@example.comTo contact the editors responsible for this story: Liana Baker at firstname.lastname@example.org, Michael J. Moore, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Goldman Sachs is growing concerned about Apple Inc., and it is not alone.While shares of the iPhone maker have been stronger of late, the advance comes in contrast to a darker view toward the stock from analysts. Goldman is merely the latest example of growing caution as it cut its price target to one of the lowest on the Street.The consensus rating for Apple -- a proxy for its ratio of buy, hold and sell ratings -- stands at 3.76 out of 5. According to Bloomberg data, that matches the lowest since the first half of 2004.Shares of Apple fell as much as 2.7% on Friday, though it last traded down 1.9%. The stock has risen more than 13% off an August low and is less than 6% below its record close. While it slipped back under the threshold with Friday’s decline, its valuation returned above $1 trillion for this first in 2019 this week.Goldman analyst Rod Hall cut his target to $165 from $187, warning of a “material negative impact” to the company’s earnings per share as a result of a plan to offer a trial period for its Apple TV+ service.Apple responded to Goldman’s report in an email: “We do not expect the introduction of Apple TV+, including the accounting treatment for the service, to have a material impact on our financial results.”Goldman’s new target is 26% below Apple’s Thursday close, and while Hall has a neutral rating on the stock, there are only a couple of firms with a target below Goldman’s, according to data compiled by Bloomberg. The average target is about $219, matching the current share price.In addition to Goldman, recent cautious calls have included New Street Research cutting its own price target earlier this week and warning of a “multi-year decline” in iPhone demand.On Friday, Rosenblatt said it was seeing “weak” pre-orders for the latest version of the iPhone. The research firm has a Street-low price target of $150 on Apple stock, and it downgraded the shares in July. That brought the number of sell ratings to five, the highest number since at least 1997, according to historical data compiled by Bloomberg.All five of the sell ratings have come this year. In January, the number of firms with buy ratings dropped below 50% for the first time since 2004.(Adds Apple comment in sixth paragraph and Rosenblatt iPhone warning in eighth paragraph.)To contact the reporter on this story: Ryan Vlastelica in New York at email@example.comTo contact the editors responsible for this story: Catherine Larkin at firstname.lastname@example.org, Steven Fromm, Tatiana DarieFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.