GS-PA - The Goldman Sachs Group, Inc.

NYSE - NYSE Delayed Price. Currency in USD
21.25
0.00 (0.00%)
At close: 3:53PM EDT
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Previous Close21.25
Open21.24
Bid21.21 x 900
Ask21.22 x 1300
Day's Range21.21 - 21.34
52 Week Range16.45 - 22.95
Volume41,567
Avg. Volume70,912
Market Cap78.316B
Beta (3Y Monthly)0.42
PE Ratio (TTM)0.89
EPS (TTM)23.86
Earnings DateN/A
Forward Dividend & Yield0.98 (4.61%)
Ex-Dividend Date2019-07-25
1y Target EstN/A
Trade prices are not sourced from all markets
  • WeWork, WeWait, WeWorry: What’s Next for CEO Adam Neumann?
    Bloomberg

    WeWork, WeWait, WeWorry: What’s Next for CEO Adam Neumann?

    (Bloomberg) -- Steve Schwarzman has doubts. So does Larry Ellison.And so, too, do the growing numbers of Wall Street bankers and investors who are all anxiously awaiting the next move by WeWork and its brash co-founder, Adam Neumann.Neumann was a no-show this week for a long-planned appearance at a SoftBank Group Corp. three-day retreat in Pasadena, California, according to people familiar with the the matter, a further sign that company executives are hunkering down. Once the WeWork initial public offering was postponed late Monday, organizers knew Neumann’s presence would be iffy, the people said. His planned appearance was rescheduled from the first day of the event at the Langham hotel to the last and then canceled altogether.In short order Neumann’s office-sharing company has gone from a get-rich story to a you’ve-got-to-be-joking melodrama -- from WeWork to WeWait to, now, WeWorry.It was a brutal week. First, WeWork’s parent company, We Co., finally conceded that its grandiose plans for going public would have to wait.Then Schwarzman, one of the most powerful figures on Wall Street, threw shade on the company’s hoped-for valuation, which has already collapsed from upwards of $60 billion to $15 billion -- or lower.“I sort of went, what? How do you get this?” Schwarzman, the head of private equity giant Blackstone Group Inc., said of the early numbers Wednesday at a luncheon in New York. Ellison, chairman of Oracle Corp., went further, according to Barron’s. He told a group of entrepreneurs at his San Francisco home that day that WeWork is “almost worthless.”And it only gets worse. In London, two deals for major office buildings that are largely leased out to WeWork started to fray. Back in its hometown of New York, the company made a small round of job cuts. And the Wall Street Journal, examining WeWork’s over-the-top culture, reported that Neumann and his friends smoked marijuana on a private jet en route to Israel last summer -- and left a chunk of the drug behind, spurring the plane’s owner to summon it back.If all that weren’t enough, Neumann’s own bankers were getting antsy: They were looking to revise a $500 million credit line secured by WeWork stock -- an acknowledgment that those shares appear far less solid than they used to.New RisksAnd, by Friday, Wendy Silverstein, a big name in New York commercial real estate who joined WeWork last year as head of its property investment arm, had left the company. She’s spending time caring for her elderly parents.Even the president of the Federal Reserve Bank of Boston was adding to the angst. In a speech Friday in New York, Eric Rosengren warned that the proliferation of co-working spaces might pose new risks to financial stability.A WeWork representative declined to comment on Neumann’s canceled appearance at the SoftBank conference, citing the pre-IPO quiet period. SoftBank also declined to comment.Rarely has so much gone so wrong so fast for a young company in the spotlight. Neumann has begrudgingly agreed to cede some of his powers. The question now: Will that be enough?“I’ve never seen a company of this size and scale generate such a consensus of negative opinion in my long, long life of following IPOs,” said Len Sherman, a Columbia Business School adjunct professor whose 30-year business career included time as a senior partner at consulting firm Accenture Plc. “There is no box that they haven’t ticked when you think of all the reasons that you might be very concerned -- like blaring red lights. Like, oh my gosh, caution, danger, danger.”WeWork now hopes to go public next month. But even that may be optimistic. Neumann, also We Co.’s chief executive officer, has to persuade investors that his company -- which has raised more than $12 billion since its founding and never turned a nickel of profit -- is worth billions on the stock market.Deadline LoomsTime is short. WeWork must complete its IPO before the end of the year to keep access to a crucial $6 billion loan.The company’s $669 million of bonds due in 2025 have dropped 5 cents this week to 97.75 cents on the dollar as of Thursday, according to the Trace bond-price reporting system.A few hours after the Journal story hit Wednesday, investors at a Goldman Sachs Group Inc. conference in New York heard from Snap Inc.’s Evan Spiegel -- Neumann’s predecessor as a celebrated startup founder whose behavior and company control attracted unflattering attention as the unicorn went public in 2017.He was asked what advice he’d give to founders looking to become CEOs of companies that have to answer to shareholders. His answer:“Don’t go public.”(Updates with CEO’s canceled appearance in third paragraph.)\--With assistance from Gillian Tan, Matthew Boesler and Sarah McBride.To contact the reporters on this story: Ellen Huet in San Francisco at ehuet4@bloomberg.net;Scott Deveau in New York at sdeveau2@bloomberg.net;Gwen Everett in New York at geverett10@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Gillen, Daniel TaubFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Traders Who Can’t Code May Become Extinct, Goldman’s Tech Pioneer Warns
    Bloomberg

    Traders Who Can’t Code May Become Extinct, Goldman’s Tech Pioneer Warns

    (Bloomberg) -- Just how important will the ability to write computer code be to a successful career on Wall Street?According to R. Martin Chavez, an architect of Goldman Sachs Group Inc.’s effort to transform itself with technology, “It’s like writing an English sentence.”As Chavez prepares to leave the company, the onetime commodities staffer who rose to posts overseeing technology and ultimately trading is reflecting on his “26-year adventure” in the industry. “The short, short description of it is making money, capital and risk programmable,” he said in a Bloomberg Television interview to be broadcast Friday. “There are certainly many kinds of manual activities that computers are just better at.”Chavez, 55, outlined strengths that can help humans stay relevant, such as their relationship skills and ability to assess risks. Yet he predicted that longstanding career dichotomies on Wall Street, like trader versus engineer, will go away. To keep working, people will need both of those skills. Even money is going digital, a shift that goes far beyond cryptocurrencies, he said, pointing to the success of Stripe Inc. as an example of creating new ways to move funds.Stripe, for its part, has become one of the most valuable companies in Silicon Valley.Mom’s AdviceOnce Chavez leaves the bank at the end of the year, he plans to focus on “programmable money” and spend time thinking about and investing in “programmable life.”In many ways, his career to date illustrates Wall Street’s own evolution. He was early in combining traditional banking activities and engineering, honing skills in the 1990s that companies are now vying to bring into their top ranks.He was also openly gay at Goldman Sachs at a time when it was virtually unheard of. And he’s Latino, a group particularly underrepresented across Wall Street’s leadership.His mother used to tell him that he would have to work twice as hard to be successful -- which he called “excellent, excellent advice.” Ironically, something that helped him in his career, he said, was being able to speak Spanish in his job.His mom also coached him not to get wound up by what other people say. He said the lesson he took from one of her mantras, “Que digan misa,” was that “I’m just going to do what I know is right, I’m going to do my thing, and trust that it’s going to work out.”To contact the reporter on this story: Sonali Basak in New York at sbasak7@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Goldman Shows Bright Future for Banks, If Not for Bankers
    Bloomberg

    Goldman Shows Bright Future for Banks, If Not for Bankers

    (Bloomberg Opinion) -- The continuing debate about the future of banking since the 2008 financial crisis has intensified recently on reports that banks are cutting jobs and slashing pay. While the outlook for bankers is precarious, the same can’t be said for the banks.  Goldman Sachs Group Inc. has featured prominently in the chatter about cutbacks, and not just because of its preeminence among U.S. banks. As Bloomberg News reported on Monday, Goldman’s compensation per employee plummeted 61% from 2007 to 2018 after adjusting for wage growth during the period, the largest decline among 12 big U.S. and European banks Bloomberg analyzed. Apparently, few at Goldman were spared a pay cut. Chief Executive Officer David Solomon was paid $23 million last year, a third of what former CEO Lloyd Blankfein was paid in 2007.Pay isn’t the only thing declining at Goldman. Reports also surfaced on Monday that Chief Risk Officer Robin Vince is leaving, the latest in a long line of senior departures. The Wall Street Journal reported earlier this month that up to 15% of Goldman's partners may depart in 2019, far higher turnover than normal, even as Goldman named its smallest class of partners in two decades last year.The problem, according to Odeon Capital analyst Dick Bove, is that the “Fourth Industrial Revolution” — the widespread fear that robots will replace human workers — is already encroaching on trading and investment management, two key divisions at many big banks, including Goldman. Upstart financial firms are leveraging technology to offer those and other services at a lower cost, luring clients from incumbents such as Goldman and pressuring them to lower fees.Suffice it to say, big banks can’t continue to carry an army of well-paid bankers while tech-savvy competitors undercut their fees. Goldman spent roughly $12.3 billion on compensation and benefits in 2018, more than half of its total operating expenses, and just $1 billion on communications and technology, which is typical of Wall Street banks.Meanwhile, trading revenue at the five biggest U.S. banks on Wall Street shrank 8% last quarter after declining 14% in the first. In response to its own trading slump, Citigroup Inc. is preparing to cut hundreds of trading jobs this year, and it’s almost certainly not alone. “The rest of Wall Street is thinking the same way,” Jeff Harte, an analyst at Sandler O’Neill, told Bloomberg News in July.The big banks have little choice but to deploy robots of their own. Goldman bought financial adviser United Capital earlier this year, in part to acquire its digital platform FinLife CX. That followed its acquisition of personal finance app Clarity Money last year, now part of Goldman’s online bank Marcus. Merrill Lynch, once the archetypal high-touch brokerage firm, introduced an online discount broker in 2016 and a robo-adviser soon after. JPMorgan Chase introduced similar services recently.  The move to automation is obviously bad for rank-and-file bankers, but it’s no better for their bosses because a smaller headcount requires fewer managers. So it makes sense that Goldman is culling its upper ranks. Solomon says that shrinking the number of partners is meant to restore “the aspirational nature of the partnership,” which is probably a gentle reminder that the firm no longer needs many of its nearly 500 partners.     What’s bad for bankers, however, is likely to be a boon for shareholders. Big banks are transforming into vast technology platforms overseen by a smaller core of executives and business generators. Solomon appears to acknowledge as much by aiming to keep the partner ranks weighted toward rainmakers, according to the Journal, a role that the bots can’t play. The horde of midlevel bankers will undoubtedly be thinned, too, and some of them replaced with lower-paid programmers and engineers. Automation is likely to make banks more profitable, even as fees for their services continue to decline.  The big banks also have little to fear from upstarts. Technology becomes cheaper and more widely available over time, but brand and distribution is enduring and difficult to attain. That gives Goldman and its peers a considerable edge. Remember NetBank and Bank of Internet USA? They were online banks that threatened to dethrone brick-and-mortar ones during the dot-com boom of the late 1990s. But once they demonstrated that online banking was the future, big banks rushed to offer similar services and cornered the market before the newcomers could gain traction. A similar story is unfolding with online trading, lending and money management.There are signs that the changes underway at financial firms are already paying off. Net income margin, or earnings as a percentage of revenue, for the S&P 500 Financials Index jumped to 17.5% in 2018 from an average of 12.4% from 2009 to 2017. It’s expected to climb to 18% this year, nearly matching the previous high of 18.8% in 2006. Return on capital was the highest on record in 2018 and is expected to grow again this year.The future of banking may not be bright for bankers, but it’s likely to be more lucrative for banks and their shareholders.   To contact the author of this story: Nir Kaissar at nkaissar1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nir Kaissar is a Bloomberg Opinion columnist covering the markets. He is the founder of Unison Advisors, an asset management firm. He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young. For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Procore Taps Goldman for IPO at $4 Billion-Plus Value
    Bloomberg

    Procore Taps Goldman for IPO at $4 Billion-Plus Value

    (Bloomberg) -- Procore Technologies Inc. is working with Goldman Sachs Group Inc. to lead a U.S. initial public offering that could value the construction-management software maker at more than $4 billion, according to people with knowledge of the matter.The company is preparing an IPO for this year or early next year, said one of the people, asking not to be identified because the information is private. The company is on track to generate more than $400 million in revenue this year, this person said.Procore’s IPO plans aren’t finalized and could change, the people said.A representative for Procore couldn’t immediately be reached for comment. A representative for Goldman Sachs declined to comment.Procore would join a flurry of enterprise software IPOs that have delivered some of the best debut performances this year.Datadog Inc. rose as much as 53% in its trading debut Thursday, after rejecting a takeover offer from Cisco Systems Inc. Ping Identity Holding Corp. gained as much as 32% in its first day of trading Thursday.Procore makes software that lets building owners, developers and contractors manage and collaborate on projects, according to its website.It has raised more than $200 million and was most recently valued at $3 billion, according to a statement in July. It reported more than $250 million in annual recurring revenue, it said in the statement.Backers include hedge fund Tiger Global Management and Iconiq Capital, which manages money for billionaires including Facebook Inc. co-founder Mark Zuckerberg.To contact the reporters on this story: Liana Baker in New York at lbaker75@bloomberg.net;Crystal Tse in New York at ctse44@bloomberg.netTo contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Michael Hytha, Matthew MonksFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Why Wall Street Pay Is Plunging
    Investopedia

    Why Wall Street Pay Is Plunging

    Average pay at the biggest firms on Wall Street has plunged from levels before the 2008 financial crisis, despite record profits being posted by U.S. banks, according to a detailed report in Bloomberg. Pay may be headed down yet more as interest rate cuts by the Federal Reserve threaten to dampen profit growth in the financial sector. Adjusted for average nominal wage growth since 2007, the biggest drops in average pay per employee among the 12 largest U.S. and European banks have been: 61% at Goldman Sachs, 46% at Credit Suisse, 36% at Deutsche Bank, 34% at Morgan Stanley, 32% at UBS, and 21% at JPMorgan.

  • Reuters

    UPDATE 3-Big banks score win as U.S. regulator proposes easing post-crisis derivatives rules

    A U.S. banking regulator on Tuesday proposed easing a rule requiring banks to set aside cash to safeguard derivatives trades between affiliates, marking one of the biggest wins for Wall Street lenders under the business-friendly Trump administration. The proposal, by the Federal Deposit Insurance Corporation, could potentially free $40 billion across the nation's largest banks, according to a 2018 survey by the International Swaps and Derivatives Association (ISDA), the global trade group that has been lobbying for the rule change for years. The proposal is subject to public comment and will likely face resistance from Democratic lawmakers and consumer groups, who have warned that chipping away at regulations put in place following the 2007-2009 financial crisis could sew the seeds of the next one.

  • Visa’s Investment Shows Plaid Could Replace Libra in Fintech Space
    InvestorPlace

    Visa’s Investment Shows Plaid Could Replace Libra in Fintech Space

    Visa (NYSE:V), seeking entrance into the center of 21st century banking, has joined MasterCard (NYSE:MA) in taking a stake in fintech startup Plaid. Plaid writes application program interfaces that act as the infrastructure beneath bank accounts. This lets it power customer-facing fintech specialists like PayPal's (NASDAQ:PYPL) Venmo, Robinhood, Chime and Betterment.Source: Shutterstock Enabling new banking services could make Plaid a sort of Microsoft (NASDAQ:MSFT) for the fintech age -- an operating system for computerized banking.Plaid has attracted $310 million in financing. Its most recent funding round valued it at $2.7 billion. Other backers include Goldman Sachs (NYSE:GS), Citigroup (NYSE:C) and American Express (NYSE:AXP).InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut it's Visa and MasterCard, which have a joint value of almost $700 billion, that are the real get. They have global scale, brand names and good reputations for security and reliability. Battling AlibabaPlaid is ranked as the eighth largest fintech startup. The list is led by credit card issuer Stripe and includes SoFi, a lender whose name will grace the new Los Angeles football stadium. Fintech companies raised a total of nearly $40 billion last year.Fintech startups are trying to get around the high costs of working with the present banking system. Visa and Mastercard are part of that. But Visa and Mastercard are also trying to get around those costs, seeing the growth of chat-based Chinese payment systems from Alibaba (NYSE:BABA) and Tencent Holding (OTCMKTS:TCEHY). * 7 Momentum Stocks to Buy On the Dip There was an assumption that Facebook's (NASDAQ:FB) Libra -- a cheaper payment system riding on FB's data network -- might be the first to escape the high costs. Both Visa and MasterCard were part of Libra's 28-member founding group announced in June. But there are increasing doubts that financial regulators will allow Libra to launch, as many fear Facebook's size. These regulators seem to have no such fears regarding the payment processors. The Fintech StackThe investment in Plaid, which already serves cryptocurrency companies like Coinbase, brings Visa and MasterCard closer to the new financial world's operating system.Fintech is building a new financial payments stack. Right now, most of the value in the stack is in the loans it creates or the investments it enables. But as the software stack evolves, history shows that it's the company at the bottom of that stack that gains the most power, as Microsoft did starting in the early 1990s.Plaid CEO Zach Perret said his goal is to create a digitized financial system. Visa executive Bill Sheedy said his strategic goal is more important than the financial investment.That strategic goal increasingly looks like a bank. Verifying users and account balances is key to enabling loans, payments and investment -- essentially all the functions of banks like JPMorgan Chase (NYSE:JPM). Visa stock's market cap exceeded that of JPMorgan just in the last year. Many Plaid customers compete directly with banks like JPMorgan. The Bottom Line for Visa Stock and PlaidWhile Visa's payment network has proven to have enormous financial power, it still faces challenges. It can charge merchants up to 3% of a transaction's cost to process through its network. The money is soaked up by processors and banks that are part of the Visa stock network.These payment networks won't work in developing nations. The cost is too high for small merchants to bear. Instead of staying with cash, many are moving to cheaper fintech alternatives that can run through customers' mobile phones.Whether these merchants will stay with Chinese and Indian payment systems, or seek Western alternatives to access Western wallets, remains an open question. The Plaid investment shows just how desperate Visa and Mastercard are to answer that question in the affirmative.Dana Blankenhorn is a financial and technology journalist. He is the author of the environmental story, Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in MSFT, BABA and JPM. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post Visa's Investment Shows Plaid Could Replace Libra in Fintech Space appeared first on InvestorPlace.

  • Bloomberg

    Coding Startup GitLab Hits $2.75 Billion Value With New Funding

    (Bloomberg) -- GitLab Inc., a platform for developing and collaborating on code, has raised $268 million in new funding in a round valuing the startup at $2.75 billion, more than double its last valuation, the company said.The San Francisco-based startup provides a single application for companies to draft, develop and release code. The product is used by companies including Delta Air Lines Inc., Ticketmaster Entertainment Inc. and Goldman Sachs Group Inc.GitLab helps companies “get faster from ‘I want to make this,’ to getting the software out the door,” Chief Executive Officer Sid Sijbrandij said in an interview. “All the companies are becoming software companies, every change you want to make influences software, and the faster you can make that change, the easier it is.”The new funds will be used to add monitoring and security to GitLab’s offering, and to increase the company’s staff to more than 1,000 employees this year from 400. GitLab is able to add workers at a rapid rate, since it has an all-remote workforce, Sijbrandij said.The investment also comes in preparation for a potential public offering next year. GitLab’s largest competitor, GitHub Inc., was acquired by Microsoft Corp. in a stock deal announced in June 2018 worth $7.5 billion. But GitLab will instead aim for the public markets, targeting an IPO or direct listing next fall, Sijbrandij said.“We’d rather stay independent as a company,” he said. GitLab has set a tentative date of Nov. 18, 2020, but the CEO added that the startup will watch market conditions and that nothing is guaranteed.The Series E funding round was led by ICONIQ Capital and Goldman Sachs. New investors include Adage Capital Management, Alkeon Capital and Two Sigma Ventures, among others.GitLab has raised a total $426 million so far, including the new round.To contact the reporter on this story: Kiley Roache in New York at kroache@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Molly Schuetz, Anne VanderMeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Reuters

    UPDATE 5-WeWork delays IPO after frosty investor response

    WeWork owner The We Company has postponed its initial public offering (IPO), walking away from preparations to launch it this month after a lacklustre response from investors to its plans. The U.S. office-sharing startup was getting ready to launch an investor road show for its IPO this week before making the last-minute decision on Monday to stand down, people familiar with the matter said. The company has been under pressure to proceed with the stock market flotation to secure funding for its operations.

  • Oil Prices Jump Most on Record After Saudi Arabia Strike
    Bloomberg

    Oil Prices Jump Most on Record After Saudi Arabia Strike

    (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 vtobben@bloomberg.netTo contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Joe Carroll, Mike JeffersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • 6 Cheap Stocks With a Margin of Safety
    GuruFocus.com

    6 Cheap Stocks With a Margin of Safety

    Citigroup tops the list Continue reading...

  • This Isn’t Facebook: WeWork’s Lesson in Going Public
    Bloomberg

    This Isn’t Facebook: WeWork’s Lesson in Going Public

    (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 gtan129@bloomberg.netTo contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, ;Michael J. Moore at mmoore55@bloomberg.net, David GillenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Reuters

    Morgan Stanley retains billing as top adviser in activist fights -Refinitiv data

    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.

  • InvestorPlace

    7 Dow Titans Breaking Higher

    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.

  • Investing.com

    StockBeat: Apache Jumps as Oil Soars

    Investing.com - Apache (NYSE:APA) shares were soaring Monday in the aftermath of a drone attack on Saudi Arabia oil facilities on Saturday.

  • Reuters

    Goldman Sachs head of risk to step down - memo

    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.

  • Is The Goldman Sachs Group, Inc. (NYSE:GS) Potentially Undervalued?
    Simply Wall St.

    Is The Goldman Sachs Group, Inc. (NYSE:GS) Potentially Undervalued?

    The Goldman Sachs Group, Inc. (NYSE:GS) saw a double-digit share price rise of over 10% in the past couple of months...

  • Prime Brokerage Services Are Coming to Crypto
    Insider Monkey

    Prime Brokerage Services Are Coming to Crypto

    “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. […]

  • TheStreet.com

    Goldman Sachs Risk Chief to Retire in Latest Shakeup at Investment Bank

    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.

  • Bloomberg

    BTG Takes Cue From Blankfein With Digital Bank to Weather Storms

    (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 fmarques10@bloomberg.netCristiane Lucchesi in Sao Paulo at clucchesi5@bloomberg.netTo contact the editor responsible for this story: Michael J Moore at mmoore55@bloomberg.net, Dan ReichlDavid ScheerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • U.S. Banks Are More Profitable Than Ever, But Wall Street Pay Is Slipping
    Bloomberg

    U.S. Banks Are More Profitable Than Ever, But Wall Street Pay Is Slipping

    (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 yonaran@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Daniel Taub, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Goldman Is Using JPMorgan’s Own Tactics Against It in ETF Battle
    Bloomberg

    Goldman Is Using JPMorgan’s Own Tactics Against It in ETF Battle

    (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 cwilson166@bloomberg.net;Ksenia Galouchko in London at kgalouchko1@bloomberg.net;Elizabeth Rembert in New York at erembert@bloomberg.netTo contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Yakob Peterseil, Rachel EvansFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • WeWork Plows Ahead With IPO, Reshapes Board to Counter Skepticism
    Bloomberg

    WeWork Plows Ahead With IPO, Reshapes Board to Counter Skepticism

    (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 gtan129@bloomberg.net;Giles Turner in London at gturner35@bloomberg.net;Michelle F. Davis in New York at mdavis194@bloomberg.netTo contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Michael J. Moore, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Goldman’s Apple Call Is Latest Example of Analyst Caution
    Bloomberg

    Goldman’s Apple Call Is Latest Example of Analyst Caution

    (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 rvlastelica1@bloomberg.netTo contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm, Tatiana DarieFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.