GS - The Goldman Sachs Group, Inc.
| Previous Close | 195.70 |
| Open | 195.34 |
| Bid | 194.85 x 800 |
| Ask | 195.95 x 1800 |
| Day's Range | 193.97 - 198.34 |
| 52 Week Range | 151.70 - 245.08 |
| Volume | 3,326,403 |
| Avg. Volume | 2,540,504 |
| Market Cap | 71.682B |
| Beta (3Y Monthly) | 1.30 |
| PE Ratio (TTM) | 8.16 |
| EPS (TTM) | 24.02 |
| Earnings Date | Jul 16, 2019 |
| Forward Dividend & Yield | 3.40 (1.74%) |
| Ex-Dividend Date | 2019-05-29 |
| 1y Target Est | 230.76 |
- Yahoo Finance Video•3 days ago
'Goldman Sachs at 150' documentary trailer released
The history of Goldman Sachs spans 150 years, and to celebrate that history, the bank collaborated with noted historical documentary filmmaker Ric Burns to create a 10-part series, chronicling the financial giant from its humble beginnings, to now. 'Goldman Sachs at 150' debuts next Monday on Amazon Prime, and Yahoo Finance has the exclusive trailer
- Yahoo Finance Video•3 days ago
Largest U.S. banks clear first round of stress tests
U.S. banks clear first hurdle of Federal Reserve’s annual stress test. Brian Cheung joins the Final Round to discuss the implications and what’s next for the big banks.
- Yahoo Finance Video•4 days ago
Adam Dell is helping to explore and shape the future of finance
Some giants of Wall Street and the up-and-coming new guard of fintech, blockchain, and venture capital are meeting in Montauk, NY to explore and shape the future of finance. That's where Yahoo Finance's Julia La Roche sat down with Adam Dell, the head of product for Marcus by Goldman Sachs. She asked him how Marcus will attract customers and retain them.
- Yahoo Finance•16 hours ago
Goldman Sachs plans to disrupt banking like Amazon did retail, Apple in music
“There is no reason why you need to walk to a branch to do banking," a top Goldman Sachs executive says.
- Bloomberg•3 hours ago
Trade War Threatens Best Emerging-Market Bond Gain in Decade
(Bloomberg) -- The best returns in a decade for emerging-market bonds just got a further boost as central banks move toward more easing. Now fund managers must navigate trade tensions and geopolitics that could derail the rally.Investors are optimistic after the Federal Reserve signaled it was ready to cut interest rates and the European Central Bank indicated more stimulus may be on the way. But money managers are tempering their outlook with caution on the planned meeting between Donald Trump and Xi Jinping at the G-20 summit this week, and amid tensions in the Middle East.“We are bracing ourselves” for the U.S.-China trade war to continue, said Angus Bell, a senior portfolio manager in emerging-market debt at Goldman Sachs Asset Management, who doesn’t see a resolution to the trade dispute in the near future. The money manager expects “mid-single digit returns” for the rest of the year in EM dollar bonds, he said.Union Investment Privatfonds GmbH says there is the risk that somewhere a human factor will lead to an accident. Tensions between the U.S. and Iran have surged after the downing of a U.S. drone and attacks on tankers. Amid the trade uncertainties, Schroder Investment Management says that in Asia, most investment-grade issuers should be less affected given they aren’t directly exposed to global trade and will benefit from strong Chinese economic policy support.Asia’s strong economic fundamentals also make Japan’s Asset Management One Co. prefer emerging-market credits from the region, which they expect will be more resilient in a risk-off scenario.Even after emerging-market dollar bonds scored a 9% return from Dec. 31, the most for any similar period in a decade, many investors still see them continuing to do well, as monetary easing burnishes the appeal of the higher-yielding assets.Read more: Easy Does It Across Global Central Banks in 2019’s Busiest WeekHere are further views from the investors and analysts:Brett Diment, head of global emerging-markets debt at Aberdeen Standard Investments:“If we see a period of somewhat slower U.S. growth, the Fed cutting rates, but not a U.S. recession, that is generally a pretty good environment for emerging-market fixed income"Expects a de-escalation in frictions as the 2020 U.S. presidential election nears and Trump focuses on re-electionAngus Hui, head of Asian credit and emerging-market credit at Schroder Investment Management:In an environment of lower rates for longer, carry remains important, and Asia investment-grade debt continues to be one of the relatively higher-yielding markets in the IG worldMost high-yield credits in China aren’t directly exposed to global trades and the recent correction offers some interesting entry points, such as in short-dated Chinese property credits Satoru Matsumoto, Tokyo-based fund manager at Asset Management One:Expects local currency IG EM bonds to outperform in second half with large risks surrounding Trump administration and trade disputesCathy Hepworth, co-head of the emerging-markets debt team at PGIM Fixed Income:Some bonds of sovereigns that have bailout packages from the International Monetary Fund pay 7% or more, and are attractive where central banks are stepping in to prop up growthSergey Dergachev, senior portfolio manager at Union Investment Privatfonds GmbH in Frankfurt:Indian and Indonesian corporates offer good relative value and election risk is out of the way in both countriesCautious on Mexican and Chinese credit due to headline risk and long-term risk of stress in ties with U.S. Key risks are fears that with so many geopolitical events happening, there could be an “an accident,” for example, in Iran situationWilliam Goh, fixed-income analyst at Lion Global Investors:China’s hardware technology sector has been caught in the cross-hairs of the U.S.-China trade tensions, so prudent to pare back our exposure to the sectorHave been incrementally moving into defensive positions, as trade tensions between the U.S. and China continue; core China state-owned enterprises remain a relative safe haven, welcomed by Chinese onshore investors and some Asian investors Raphael Marechal, head portfolio manager, emerging markets at Nikko Asset Management:“The search for yield is going to be even greater in the second half of the year”“We expect risk appetite to remain excellent for the last six months of the year, so that’s more of a positive for high-yielding assets”Bryan Carter, head of emerging-market fixed income at BNP Paribas Asset Management:Anticipates another 3-5% in returns in the second half for EM dollar bonds, with Fed easing an important tailwind(Updates chart.)\--With assistance from Lilian Karunungan.To contact the reporters on this story: Finbarr Flynn in Tokyo at fflynn3@bloomberg.net;Kyungji Cho in Seoul at kcho54@bloomberg.net;Yumi Teso in Bangkok at yteso1@bloomberg.netTo contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, ;Tomoko Yamazaki at tyamazaki@bloomberg.net, Beth ThomasFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters•5 hours ago
Malaysia's 1MDB criminal case against Goldman Sachs delayed to September
Malaysia's criminal case against U.S. investment bank Goldman Sachs involving $6.5 billion 1MDB bonds will be postponed to September, a court ruled on Monday, after defence lawyers asked for more time to receive instructions from their clients abroad. Malaysian prosecutors had previously issued summonses to three Goldman Sachs units in the United Kingdom, Hong Kong and Singapore, requiring them to respond to criminal charges filed against them over bond issues that the bank had arranged for state fund 1Malaysia Development Berhad (1MDB).
- Investopedia•7 hours ago
The Koch Brothers: 2nd Wealthiest Family in America
Here's a look at Koch Industries and the owners, brothers Charles and David, that make up the second-richest family in America.
- Investing.com•yesterday
Economic Calendar - Top 5 Things to Watch This Week
Investing.com - Market watchers will be looking ahead to a meeting between U.S. President Donald Trump and China's President Xi Jinping this week amid hopes for a thaw in trade relations, even if it alters expectations for Federal Reserve rate cuts.
- Bloomberg•3 days ago
Goldman, Morgan Stanley Do Better in Fed Stress Tests After 2018’s Stumble
(Bloomberg) -- Goldman Sachs Group Inc. and Morgan Stanley improved on last year’s poor results in the first round of the latest Federal Reserve stress tests, a sign they may have more flexibility to boost payouts to shareholders.In figures posted Friday by the Fed, the pair didn’t come as close to breaching regulatory minimums as they did last year, offering hope they will escape limits on dividends and stock buybacks imposed back then. All 18 banks in the exam demonstrated an ability to withstand a hypothetical financial shock. The second and final round next week determines whether firms win approval to boost capital payouts.Results posted so far show banks are getting better at coping with what’s become one of the most rigorous supervisory efforts: They maintained a collective common equity Tier 1 ratio that was double the regulatory minimum even at the depths of the theoretical recession. Lenders have been building capital for years, and while this year’s exam was harsher on credit-card loans, trading losses were down from last year at four of the five biggest Wall Street firms.Still, when the process wraps up next week, analysts expect big banks to slow the expansion of payouts to shareholders after two years of surging dividends and buybacks.Goldman Sachs and Morgan Stanley were allowed to dip below the required minimums in the second part of last year’s test because some of the decline was a result of one-time charges related to the 2017 federal tax overhaul. After next week’s round, Goldman is expected to modestly reduce its total payout in dollar terms while Morgan Stanley modestly increases it, according to analyst estimates compiled by Bloomberg before Friday’s results.This year, Goldman Sachs’s supplementary leverage ratio fell to as low as 4% in the first round of the Fed’s test, an improvement from 3.1% last year. Morgan Stanley’s ratio was 3.9%, compared with 3.3% last year. To carry out proposals to distribute capital, banks need to remain above 3% by that measure in next week’s test.Taking ‘Mulligan’Lenders are given a chance to adjust and resubmit their cash distribution plans before the second set of results is released June 27. A record number of firms used the so-called mulligan last year to adjust their original payout requests to stay above the minimum requirements.The 12 largest U.S. lenders tested are expected to boost payouts by $5 billion in the next four quarters, after dividends and buybacks jumped by more than $30 billion each of the past two years. Still, the increase means they’ll likely pay out more than 100% of their annual profit.In past years, some banks had initial proposals for payouts reined in after they projected their capital and leverage ratios would hold up better than what the Fed calculated. In some cases, the Fed even took issue with the strength of their capital planning.This year, a half dozen firms including Bank of America Corp. posted internal calculations that were instead lower than the Fed’s, indicating they were even more conservative than examiners. Still, several companies were more optimistic. Morgan Stanley, for example, calculated its leverage ratio would be 1.7 percentage points higher than what the Fed found. Altogether, the 18 banks tested would suffer a $115 billion pretax loss in the severely adverse scenario, the Fed said. That amounts to 0.8% of the banks’ average assets, the same ratio as under last year’s test. Their hypothetical revenue before provisions and trading losses was projected by the Fed to be 2.4% of assets, down from 3% last year.A steeper yield curve foreseen in last year’s scenario helped prop up pre-provision revenues because banks make more money when the gap between short-term and long-term rates widens. The change in assumptions about interest rates this time helped banks book gains in their Treasury portfolios even as it lowered their pre-provision revenues.Credit CardsThis year’s stress scenario featured a harsher hypothetical recession and the worst increase in unemployment used in the tests so far, yet its stock- and bond-market losses were less severe than last year. That helped Goldman Sachs and Morgan Stanley, which derive more of their income from securities trading than lending.Historically, losses tied to credit cards and commercial loans tended to be similar amounts. But this year, losses tied to cards under the central bank’s severely adverse scenario reached $107 billion, outpacing the $73 billion in losses produced by their commercial counterparts.The central bank said credit-card loss rates increased “due in part to the final phase-in of changes to the supervisory credit-card model.” That model changed how Fed treats uncollected interest and fees at the time of default.Foreign BanksFriday’s results also included what would happen to the capital ratios of six foreign banks’ U.S. units under the same scenario. HSBC Holdings Plc’s U.S. arm saw its leverage ratio fall to within a percentage point of the minimum, the narrowest margin in this year’s group. Next week, units of foreign banks also face a qualitative evaluation of their risk management, data-collection capabilities and capital planning. That’s where some of them could trip up.Foreign firms failing the test can’t repatriate profits earned in the U.S. to their parent companies. For Deutsche Bank AG, whose U.S. units have failed the test three times already, a failing grade will be yet another blow to investor confidence as it struggles with restructuring efforts and profitability. The Fed placed the firm’s U.S. arm on a list of troubled lenders last year because of deficiencies in its internal oversight.The exams are in flux because the Fed is working on a rule that will more closely marry the stress testing process with day-to-day capital decisions at the banks. And the agency has tried to make the regime more transparent -- an effort that has accelerated amid President Donald Trump’s deregulatory agenda.As part of that effort, Congress passed a law last year ordering less strict treatment of smaller banks. That prompted the central bank to ease the stress test burden on a dozen regional U.S. lenders and half a dozen smaller foreign banks, which are now tested every other year and weren’t included in this year’s exercise.(Updates with companies’ own projections from the ninth paragraph.)\--With assistance from Jenny Surane and Gregory Mott.To contact the reporters on this story: Yalman Onaran in New York at yonaran@bloomberg.net;Jesse Hamilton in Washington at jhamilton33@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, ;Jesse Westbrook at jwestbrook1@bloomberg.net, David Scheer, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Barrons.com•3 days ago
The Biggest Banks in the U.S. Just Passed Their ‘Stress Test’
The largest banks in the U.S.—including Morgan Stanley, Goldman Sachs, Bank of America, Citigroup, and JPMorgan—have sufficient capital that would allow them to weather a severe recession, the Federal Reserve said.
- MarketWatch•3 days ago
Fed's stress test shows nation's top banks could withstand $410 billion of losses
The nation's largest banks have enough capital to withstand a severe recession, the Federal Reserve said Friday. The so-called stress tests showed that 18 big banks including Bank of America , JPMorgan Chase and Citi could absorb a cumulative $410 billion of losses, with a global recession and the U.S. unemployment rate rising by more than 6 percentage points, the Fed said. The firms' aggregate common equity tier 1 capital ratio, which compares high-quality capital to risk-weighted assets, would fall from an actual level of 12.3% in the fourth quarter of 2018 to a minimum level of 9.2%. Next week the Fed will say whether the banks can make the share buybacks and dividend payments they want to give to shareholders.
- Yahoo Finance•3 days ago
Goldman Sachs to drop a documentary on Amazon Prime next week
Goldman Sachs is releasing a documentary on Amazon, where Warren Buffett and others make appearances.
- Bloomberg•3 days ago
With Slack Sitting Pretty, Its Bankers Eye More Direct Listings
(Bloomberg) -- Slack Technologies Inc.’s trading debut was everything Wall Street wanted it to be: nothing flashy.The company’s advisers anticipate that more firms will adopt the so-called direct-listing model for going public, and give the banks an edge over rivals who have little to no experience in pulling off a listing like Slack’s.There could be five direct listings next year -- or more, depending on how the overall market for public offerings shapes up, said Colin Stewart, global head of technology capital markets at Morgan Stanley. His firm, along with Goldman Sachs Group Inc. and Allen & Co., are the only three companies to have had lead roles on high-profile Silicon Valley direct listings.“This will be something that companies need to consider as part of a toolkit to access the public markets,” Stewart said. “It’s clear that the model is attractive. The question will be on applicability -- how many companies will use it.”While a direct listing tends to pay banks less than a typical initial public offering, the fees are shared among fewer firms -- meaning Goldman, Morgan Stanley and Allen & Co. gain significantly by being leaders in the market. In the case of Slack, that meant at least 90% of the $22 million in fees split among the three banks, people familiar with the matter have said. The banks’ biggest rivals have yet to work on a deal of Slack’s magnitude. And the two mega-banks handled the lion’s share of the trading volumes, according to three people with knowledge of the matter, who asked not to be identified discussing private flows.‘New Model’“It has been very exciting to pioneer this new model alongside our clients, and we expect other clients to increasingly utilize this path when it best achieves their objectives,” William Connolly, co-head of the West Coast financing group and head of technology equity capital markets at Goldman, said in an email.That doesn’t portend a complete overhaul to the model for going public -- there are hundreds of traditional IPOs a year -- but Stewart’s prediction would mean more than double the number of direct listings from the past year. Unlike in an IPO, a company opting for a direct listing isn’t raising money with a sale of new stock. Instead, shares already held by founders and other early investors are simply listed for trading, making those shares easier to sell.Goldman and Morgan Stanley have been in talks with more than a dozen firms considering the direct-listing option, people familiar with the matter have said. They include Airbnb Inc., one of the hottest IPO candidates in the next year. Adding to the encouragement is that Slack’s listing went smoother that Spotify Technology SA’s last year, with the work-collaboration company’s shares staying close to its opening price in the first two days of trading -- an execution win for market makers. A Slack investor who made a recent purchase when the shares were private is up about 43%.IPO OpeningsThat’s roughly the same as standard public offerings, with this year’s technology and communications IPOs opening almost 50% above their offering prices on average, according to data compiled by Bloomberg.Bloomberg Beta, the venture capital arm of Bloomberg News parent Bloomberg LP, is an investor in Slack.While Morgan Stanley, Goldman and Allen & Co. have been most prominent in leading direct listings, other Wall Street giants have been involved in the space. JPMorgan Chase & Co., for example, has led direct listings for companies including Colony Real Estate Credit Inc., which started trading last year.Citadel Securities was picked as the designated market maker for Slack’s trading debut, and its role, along with Morgan Stanley’s as adviser to the market maker, a role the bank created ahead of Spotify’s listing, was applauded by venture capitalist Bill Gurley in a Twitter post Thursday.“Other banks want to position direct listings as ‘exceptional’ or ‘rare.’ MS believes they are 1) a better mousetrap, and 2) can be used broadly,” he wrote.John O’Farrell, a partner at Andreesen Horowitz, one of Slack’s largest early investors, was on the floor of the New York Stock Exchange for the listing Thursday, and stuck around after the crowd faded to shake hands with the market makers. His firm may have reaped $2.6 billion, according to CB Insights. Venture capital firm Accel, which held 24% of Slack as of the stock’s debut, now has a $4.6 billion stake, the research company said.Yet investors may not all cheer the model.Gurley argues that personal relationships, ties to banks and an investor’s brand determine whether it can participate in an IPO, as opposed to the algorithms used in direct listings. In the Slack and Spotify direct listings, large shareholders weren’t promised allocations beforehand. Instead, the highest bidders end up getting the biggest exposure on the first day of trading.“The hand-allocated IPO is archaic and it’s time for it to be a thing of the past,” Gurley said in a phone interview. “In a day and age of a globally connected Internet, it’s very easy for a company to be discovered and for investors to be educated about that company without visiting people one on one.”But that also means investors may have to buy in at a higher price and therefore miss out on the initial IPO pop that many in the market have gotten used to. That could be a tough reality for large investors like Fidelity Investments that are often big buyers in an IPO, and increasingly buying more stock in private markets.Smooth DebutStill, the fact that Slack’s debut went so smoothly may spur different types of companies to choose a listing method that the company described in its regulatory filings as “novel,” said Joe Mecane, head of execution services at Citadel Securities.Slack didn’t have many of the characteristics Wall Street tends to expect for a direct listing, Mecane said. Such companies typically have a well-known brand and a large base of existing shareholders to ensure stock liquidity -- and don’t have an immediate need to raise funds.Unlike Spotify, Slack is seen by many as a business-to-business company and had a more concentrated investor base than that of the music-streaming service. Also, Slack burns a significant amount of cash.\--With assistance from Drew Singer.To contact the reporters on this story: Sonali Basak in New York at sbasak7@bloomberg.net;Eric Newcomer in San Francisco at enewcomer@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Daniel Taub, Liana BakerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- The Basis Point•3 days ago
Why Did A Big Goldman Sachs Banker Say Big Banks Are Screwed?
Bank startups hope to be acquired by big banks they rip constantly.
- Zacks•3 days ago
Dow 30 Stock Roundup: Boeing's $6.5B Air Force Contract, Pfizer to Buy Array BioPharma
The index enjoyed another week of strong gains after the Federal Reserve indicated that a rate cut would likely occur next month.
- Zacks•4 days ago
Slack Directly Hits The Markets
Slack (WORK) is the most recent listing, hitting the exchanges today and immediately surging more than 50% from its reference price. Slack has taken a much different approach to make their share available to the general public.
- Simply Wall St.•4 days ago
If You Like EPS Growth Then Check Out Goldman Sachs Group (NYSE:GS) Before It's Too Late
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...
- Simply Wall St.•4 days ago
Do Institutions Own Shares In The Goldman Sachs Group, Inc. (NYSE:GS)?
A look at the shareholders of The Goldman Sachs Group, Inc. (NYSE:GS) can tell us which group is most powerful...
- Market Realist•4 days ago
Trouble for Bankers? Slack’s Direct Offering Bests Uber’s IPO
Slack (WORK) opened for trading on June 20 at around 12:00 ET. The stock opened at $38.25, 47% higher than the reference price of $26 set by the NYSE. At that price, the company is valued at over $23 billion.
- InvestorPlace•4 days ago
Thursday Apple Rumors: Apple Employees Are Testing its Credit Card
Leading the Apple (NASDAQ:AAPL) rumor mill today is news of credit card tests. Today, we'll look at that and other Apple Rumors for Thursday.Credit Card: Apple is expanding the test of its credit cards to include more employees, reports Bloomberg. The company is now allowing its retail employees to give the credit card a whirl before its official launch. Tests of the credit card were already underway with the help of AAPL's corporate employees. This new credit card is in partnership with Goldman Sachs (NYSE:GS) and will likely launch in the U.S. sometime this summer.MacBook Pro Recall: AAPL is recalling some versions of the MacBook Pro over possible defective batteries, 9to5Mac notes. This recall affects 15-inch MacBook Pro laptops sold between September 2015 and February 2017. AAPL claims that the reason for this recall is that the batteries in the laptops can overheat. It notes that this can make them a safety risk for the owner.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTrump Tariffs: Apple is trying to avoid President Donald Trump's tariffs on its devices, reports AppleInsider. The company sent out a letter requesting that its products not be included in the trade war with China. The company argues that doing so will result in its global competitors gaining an unfair advantage over it. There's been talk that AAPL may choose to move creation of its products out of China to avoid the tariffs. However, this could take years to complete.Check out more recent Apple Rumors or Subscribe to Apple Rumors : RSS As of this writing, William White did not hold a position in any of the aforementioned securities. Compare Brokers The post Thursday Apple Rumors: Apple Employees Are Testing its Credit Card appeared first on InvestorPlace.
- Bloomberg•4 days ago
Slack Shares Open at $38.50 on NYSE After Unusual Direct Listing
(Bloomberg) -- Slack Technologies Inc. opened at $38.50 on the New York Stock Exchange Thursday, valuing the office chat software maker at about $19.5 billion.Shares started trading at 12:08 p.m., almost three hours after Slack Chief Executive Officer Stewart Butterfield rang the opening bell at the exchange.Unlike a traditional initial public offering, Slack’s decision to pursue a direct listing means there was no offer price for the shares. Instead, advisers spent the morning gathering buy and sell orders to assess what the first-trade price should be. The stock exchange set a reference price Wednesday of $26 a share.The market valuation of the company is based on the outstanding Class A and Class B shares, and doesn’t include restricted stock units.Slack shares trade under the ticker WORK. Goldman Sachs Group Inc., Morgan Stanley and Allen & Co. advised on the listing.To contact the reporter on this story: Elizabeth Fournier in New York at efournier5@bloomberg.netTo contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, Elizabeth Fournier, Matthew MonksFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg•4 days ago
Slack Hustles to Avoid Day One Pop as Next Unicorn to List
(Bloomberg) -- As 2019’s bumper crop of initial public offerings either languishes or wildly exceeds expectations, Slack Technologies Inc. is taking a route to the trading floor that it hopes will yield a much more boring outcome.Following in the footsteps of music-streaming service Spotify Technology SA last year, the workplace messaging application is set to start trading on the New York Stock Exchange Thursday via a direct listing. It’s just the second large company to test the unusual method and will be closely watched by other potential candidates to see how successfully the company and its advisers pull it off.Investors got their first hint of how things are going when Slack’s reference price was set at $26 per share on Wednesday. Unlike the offering price paid by investors in a traditional IPO, the reference price doesn’t establish the valuation, though it’s partly based on recent trading in private markets. Its main purpose is to provide a starting point to allow trading to begin under New York Stock Exchange rules.Slack gained its first buy rating on Thursday, ahead of its debut, as Atlantic Equities said the adoption of the company’s messaging technology within businesses is proving as viral as WhatsApp has been for consumers.With IPO heavyweight advisers from Goldman Sachs Group Inc., Morgan Stanley and Allen & Co. helping to steer Slack through its listing alongside market maker Citadel Securities, all eyes will be on how the first day of trading plays out. But the company and its investors aren’t looking for a meaningful stock pop -- and want to avoid the volatility -- that often accompanies high-profile share sales, according to a person familiar with the process.On Wednesday, Slack said that its investors had converted additional Class B stock to Class A shares, increasing the number that could be sold to 194 million from 181 million, out of a total of 504.4 million. Especially because there’s no lock-up period, there’s a risk of too few investors wanting to buy or too many wanting to sell.“A direct listing can be considered risky for a variety of reasons," Alejandro Ortiz, an analyst at SharesPost, said in a note. “There is an increased chance of substantially more supply than demand for Slack’s shares. All of this could result in heightened volatility in the early hours and days of trading.”Reference PriceFifteen months after its own direct listing, Spotify trades about 12% above its reference price of $132, at about $148 a share on Wednesday. That’s well below where the stock opened on its first day of trading in April 2018, though, at $165.90 apiece.On Thursday, much of the attention at the exchange will be focused on one man. Pete Giacchi, a longtime market maker at the NYSE for Citadel Securities, will be tasked with opening the stock –- just as he was for Uber Technologies Inc.’s listing in May, people with knowledge of the matter said. It could be a long wait: Spotify’s shares took more than three hours to start trading, and it will take a while to make sure that the pricing and trading volumes coming in are at levels that Slack and its advisers are comfortable with.Supply, DemandMorgan Stanley, as the named adviser to the designated market maker, will be constantly trying to get a sense of supply and demand for the shares to advise on that opening price. The bank’s team includes global head of technology capital markets, Colin Stewart, as well as David Chen, who leads software banking. John Paci, the co-head of U.S. equities trading, will help advise the designated market maker on where the stock should open based on buying and selling interest gleaned from investors, according to people familiar with the details.At Goldman Sachs, the work will be led by Nick Giovanni, co-head of the global technology, media and telecommunications group, equity capital markets head David Ludwig and Will Connolly, co-head of the West Coast financing group and head of technology ECM.One thing Slack’s listing will have in common with an IPO: executives including Chief Executive Officer Stewart Butterfield and finance chief Allen Shim are expected to be pacing the floor of the NYSE for the open. They may not stick around all day, though. They will likely spend some time at the offices of their advisers before celebrating with employees and customers, according to a person with knowledge of the matter.Representatives for Slack, Goldman Sachs, Morgan Stanley and Citadel Securities declined to comment.Private FundsSlack’s decision to bypass a traditional IPO -- and the opportunity it brings to raise funds -- is yet another sign of how benevolent private markets have been to tech startups in recent years. Slack’s earliest major investor, venture capital firm Accel, has directed a fire hose of money at the messaging company over the years, investing from several of its funds to accumulate a 23.8% stake.In addition to Accel, Slack captured the imagination of elite investors such as Andreessen Horowitz and Social Capital. But it was SoftBank Group Corp.’s behemoth Vision Fund, which also owns stakes in Uber and WeWork Cos., that accelerated Slack’s fundraising when it led a $250 million investment in 2017.One of the main reasons that Slack has remained well capitalized, however, is that it burns through less cash than some of SoftBank’s other investments. Uber, for instance, accumulated more than $10 billion in operating losses in three years. While Slack expects higher-than-usual losses in the second quarter, that still amounts to only about $75 million to $77 million for the three months, even including expenses related to the listing.Growth vs. ProfitabilityThe high demand for IPOs by the likes of money-losing companies including Uber, Lyft Inc. and Beyond Meat Inc. proves that investors remain focused on growth prospects over profitability –- in the short term at least.With Uber leading the pack with its $8.1 billion offering, 79 companies have raised $28.88 billion in U.S. IPOs this year, according to data compiled by Bloomberg. That includes five other listings topping $1 billion, including the $2.34 billion IPO by Uber’s ride-hailing rival Lyft.With no lock-up period for a direct listing, Slack investors could be jittery about any updates from the company, perceived competitive threats or other risks.Tiny SpeckIn its filings, Slack has warned investors that it’s a relatively new business, launching only in 2014 after existing for several years as a gaming company called Tiny Speck. Its rocket-ship ascent has attracted plenty of investors, but gives new potential shareholders only a limited trajectory to study.Another challenge for Slack is one that fellow mega startups like Uber have grappled with, namely whether they can move beyond the core offering that their early years of success were built on. While Slack has improved its product so that it can serve larger companies, many customers still consider it an easy-to-use, aesthetically pleasing workplace messaging platform, despite speculation that it could evolve into a catch-all portal for business applications.One thing that could make Slack’s debut more unpredictable than Spotify’s is its investor base. Because the company’s ownership is more concentrated among fewer, larger shareholders, it could be more difficult to gauge the supply of shares that are likely to be traded, one person with knowledge of the process said. Both buyers and sellers may also hang back on day one to see how trading goes before getting involved: Just 30 million of Spotify shares changed hands in its trading debut, less than a third of the total available.(Updates with Atlantic in fourth paragraph.)\--With assistance from Crystal Tse and William Hobbs.To contact the reporters on this story: Eric Newcomer in San Francisco at enewcomer@bloomberg.net;Sonali Basak in New York at sbasak7@bloomberg.net;Ellen Huet in San Francisco at ehuet4@bloomberg.netTo contact the editors responsible for this story: Mark Milian at mmilian@bloomberg.net, ;Michael J. Moore at mmoore55@bloomberg.net, Elizabeth Fournier, Michael HythaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Investopedia•4 days ago
How Goldman Sachs Makes Money: Public and Private Sector Financial Services
More than years after the subprime meltdown, Goldman Sachs is a robust multi-billion-dollar company instead of a historical footnote. Here's why.
- Bloomberg•4 days ago
Powell Opens Door to July Rate Cut Amid Trumpian Uncertainty
(Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan once remarked that uncertainty is the “defining characteristic’’ of monetary policy – and he never had to deal with President Donald Trump.In a reversal of policy, current Fed chief Jerome Powell on Wednesday opened the door to an interest rate cut as early as next month.He made clear that uncertainty -- primarily about the president’s trade battles and their potentially corrosive impact on the U.S. and other economies -- was a major factor behind the shift, along with weaker-than-wanted inflation.“While the baseline outlook remains favorable, the question is whether these uncertainties will continue to weigh on the outlook and thus call for additional monetary policy accommodation,’’ he told reporters after the Fed left rates unchanged.Those uncertainties may not lift any time soon. While Trump is slated to meet Chinese President Xi Jinping later this month at the G-20 summit in Japan to discuss their ongoing trade war, the president’s proclivity to abruptly shift his tariff strategy could keep corporate decision makers on edge for a while. It’s also put the European Central Bank on alert for a potential easing of its monetary policy.The trade tensions “are undercutting confidence and that is slowly spreading throughout the economy,’’ said Ethan Harris, head of global economics research at Bank of America Merrill Lynch. “The tariff termites are chewing quietly under the surface.’’Trump, for his part, has been far from quiet. He’s repeatedly criticized Powell and the Fed for keeping credit too tight and complained that the central bank is undercutting efforts to win his battles with China and other trading partners.The president asked White House lawyers earlier this year to explore options for removing Powell as Fed chair, and Trump told confidants as recently as Wednesday that he believes he has the authority to replace him, Bloomberg reported this week.Powell, who’s vowed to protect the Fed’s independence, said on Wednesday that he expects to get a clearer a read on whether the economy needs easier credit “in the very near term.’’ He also refused to rule out the possibility of a half percentage point reduction.“That’s just something we haven’t really engaged with yet,’’ he said when asked about a 25 or 50 basis point move. “It will depend very heavily on incoming data and the evolving risk picture as we move forward.’’“You can’t rule out a 50 basis point move in July,” said John Herrmann, director of U.S. rate strategy at MUFG Securities Americas. “He sounded at least willing to entertain the idea, which is more aggressive than markets were thinking.’’Goldman Sachs now expects the Fed to cut by 25 basis points in both July and September and isn’t ruling out the possibility of a bigger move of 50 basis points “if the news flow disappoints.” The need to get ahead of the bond market could be another reason to push Fed officials toward a bigger reduction, economists including Jan Hatzius wrote in a note. The Fed’s statement Wednesday and Powell’s remarks in the subsequent press conference were well received by investors, with both stock and bond prices rising.Inflation MutedThe Fed can afford to be aggressive because inflationary pressures are muted. Indeed, Powell suggested that weak price pressures could be a reason on their own for the central bank to reduce rates.“We are well aware that inflation weakness that persists even in a healthy economy could precipitate a difficult-to-arrest downward drift in longer run inflation expectations,’’ he said.The Fed has failed to convincingly hit its 2% inflation objective since 2012. What’s more, inflation expectations, particularly in financial markets, have fallen recently and Fed officials themselves marked down their forecast of price rises this year, to 1.5%, from 1.8% in March.Powell also suggested that the labor markets might not yet be tight enough to generate the sort of the wage-driven rise in inflation that the Fed is seeking.While salaries are increasing, they’re not growing “at a pace that would provide much upward impetus to inflation,’’ he said.That’s despite the fact unemployment is near a half century low of 3.6%.The Federal Open Market Committee’s vote on Wednesday to leave rates unchanged -- in a 2.25% to 2.5% range -- was not unanimous, with St. Louis Fed President James Bullard seeking a quarter-point rate cut. His vote marked the first dissent of Powell’s 16-month tenure as chairman.While officials were divided on the path for policy -- eight of 17 penciled in a reduction by the end of the year as another eight saw no change and one forecast a hike -- Powell said most agreed that the possibility of a move has risen.The risks “have called a number of us to write down rate cuts, and a number of those who haven’t to see that the case has strengthened,” he said.“The main message we heard from Powell’s press conference was that the only argument against cutting rates today was a desire to wait a little to learn a lot,’’ JPMorgan Chase & Co. chief U.S. economist Michael Feroli said in a note to clients.“The burden is on the data looking quite solid and trade policy turning more growth favorable to defuse the case for cutting at the next meeting,” he added.(Updates with Goldman rates call in 12th paragraph.)\--With assistance from Craig Torres and Malcolm Scott.To contact the reporters on this story: Rich Miller in Washington at rmiller28@bloomberg.net;Christopher Condon in Washington at ccondon4@bloomberg.netTo contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alister BullFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
