FYI:

Goldman Sachs Group riding a rising market, is considering making a multibillion-dollar offering of its shares to investors as part of an effort to repay a $10 billion government loan, according to people familiar with the matter.

The move, which could be announced as early as next week, comes as the firm prepares to report solid first-quarter earnings Tuesday. Goldman executives haven’t determined the exact size of the offering, but it is expected to be at least several billion dollars, these people say. They caution a final decision isn’t made, and will be based partly on market conditions.

>

Source:
Goldman Seeks New Stock Sale
SUSANNE CRAIG and KATE KELLY
WSJ, APRIL 10, 2009

http://online.wsj.com/article/SB123932742279007541.html

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

23 Responses to “Goldman Selling Shares to Repay Feds”

  1. some_guy_in_a_cube says:

    What’s the rush?

    Don’t they watch TV over at GS? Read the papers? This is the start of a new bull market, so GS, just relax, kick back, wait a few weeks/months/years and raise 10s or even 100s of billions more than you can get at these “bargain basement” and “fire sale” prices.

    Why is GS selling at a “generational bottom”?

  2. WaveCatcher says:

    This entire rally is a huge pump and dump orchestrated by the US Gov in concert with the Financials (GSEs). Beginning with the leaked “internal” memos (C and BofA) to trigger the initial short covering, and propelled further by Obama’s bottom call, the PPIP, the FASB MTM change (making the PPIP irrelevant), Wells Fargo earnings (who cares if they are insolvent?)

    The annointed winners (GS, JPM, MS) will now use their inflated stock price to issue stock, diluting the shareholders (taxpayers), to pay back the TARP funds, enabling them to steal the loser’s talent (recruiting), and establish their dominance atop the pile of rubbish.

    Eventually the charade will come to an end.

  3. Rajesh says:

    Don’t be silly. This rally is not organized by the government. Goldman Sachs is running this show (which is why it is going so smoothly; no underpaid bureaucrats involved in this operation.) But they can’t keep the rally going forever, just long enough to make a secondary offering. Note: taxpayers have senior preferred shares, so they won’t get diluted by a common stock offering. But still not a good return on investment.

  4. moneyneversleepsblog says:

    They don’t want to be burden with any restrictions on comp so it would make sense that they were eager to pay it back. I wonder at what point the gov’t will let them pay it back so they don’t end up exposing the weaker players who actually needed the money.

    http://moneyneversleepsblog.blogspot.com/2009/04/goldman-sachs-may-sell-stock-to-repay.html

  5. dead hobo says:

    WaveCatcher Said:
    April 11th, 2009 at 8:57 am

    This entire rally is a huge pump and dump … to trigger the initial short covering, and … Wells Fargo earnings (who cares if they are insolvent?)

    The annointed winners (GS, JPM, MS) will now use their inflated stock price to issue stock ….

    comment:
    —————–

    If oil hadn’t risen to $147 last year, I would write off your idea as nuts. Let’s see who takes opportunistic cash out of the situation. We’ll see if your idea has merit or is just a logical flash of paranoia due to lots of market manipulation and crooked activities by numerous actors in the fairly recent past.

  6. Moss says:

    I find the whole episode so typical of the banksters MO. They would be out of business w/o the Fed/Gov help and now view the assistance as a hindrance to their bankster culture. Next thing they will ask is to be de-classified as a Commercial Bank. I hope they have an early pre-payment penalty associated with the loans. WE should rape them for a while.

  7. rktbrkr says:

    Wavecatcher, BINGO! the only thing I’d add is the financials need to do their refis before the end of various moritoria in CA and the other bubble states send the property values sliding down again. O’Bamas mortgage plan won’t help many who are deeply underwater

  8. larster says:

    Moss

    Right on. Somehow it seems like we have seen this chapter before and it ended badly. If Goldman is in such great shape, why did they have to have the taxpayersa bail them out w/ the AIG derivatives? It also makes me think that the upcoming stress test/pre-nationalization period will be bleak for the bankers. Why do they have to be mum about the stress tests? So Goldman can sell it’s stock.

  9. rktbrkr says:

    I’m surprised the Feds haven’t written a law allowing federal agencies recourse over non-recourse loans. It’s too easy for borrowers/homeowners in the non-recourse bubble states to walk away from deeply underwater homes and leave lenders with huge losses. Jingle mail is actually the rational course for these people but the taxpayers are going to absorb the losses of these banks when the dust settles. In addition to the various housing agencies the US government has owership stakes in all the big banks and they could write the law broadly to cover those situations too.

  10. sccofer says:

    Read this post over on Zero Hedge then read the comments….Gives some credence to the conspiracy theory that Goldman is gaming the system to quickly get their offering out the door at an inflated price…

    http://zerohedge.blogspot.com/2009/04/incredibly-shrinking-market-liquidity.html#links

  11. Myr says:

    The market should respond very well to the notion that Goldman “has paid the government back.” Of course, the tools in the media will ignore the fact that Goldman also raised over $20 billion via the FDIC’s “Temporary Guarantee Liquidity Program(TGLP)” in recent months. Goldman should be forced to pay that debt back first. Instead, Goldman gets to use the cash from the government’s TGLP loan to pay back the government’s TARP loan. It’s laughable that anyone would report that Goldman is selling shares to pay back the government. It’s an obvious ruse and I’m surprised that you haven’t reported that ruse. C’mon Barry?

  12. batmando says:

    From the ZH article…, “Furthermore, high convexity names such as double and triple negative ETFs, which are massively disbalanced with regard to underlying values after recent trading patterns, will see shifts which will make the November SRS jump to $250 seem like child’s play.”
    So those (WHO SHALL REMAIN NAMELESS) who have taken big hits recently on triple ETFs, e.g., FAZ, might just as well sit on it in anticipation of these mad swings…?

  13. Myr,

    you’re going to have to give a little leash to ‘the demands of the Marketplace’

    sometimes, one has to ‘drop the perpendicular’ on one’s own..
    http://www.thefreedictionary.com/Perpendicular

    as well, it’s why it’s critical to “Learn more than one’s Taught.”

    maybe, on this day, franklin411 will appreciate, for a ‘Change’, such an axiom..
    http://www.thefreedictionary.com/axiom

  14. Myr says:

    @Mark,

    Spare me your obtuse nonsense about dropping the “perpendicular.” If you have something substantive to say, then say it and back it up.

  15. Myr,

    fine, I was saying that one should complete the equation themselves.

    BR, no matter how much he writes, can’t fill in every pixel of TBP.

    that he gets as close to the target as he does, is, in and of itself, a great advantage that he lends..

    as we know, there are, always, boundaries, and, from the other side of which, one’s ‘effectiveness’ can be greatly dimished..

    or, IOW, if one drinks from only one hose, they should count on dehydration..

  16. Myr says:

    @Mark,

    The *TITLE* of Barry’s own post is “Goldman Selling Shares to Repay Feds.” That title is clearly false. Goldman *already* has the cash from the TGLP to pay back the TARP. I love this blog, but that doesn’t stop me from pointing out mistakes. Get over it.

  17. Myr,

    no probs, I hear you. this: “It’s laughable that anyone would report that Goldman is selling shares to pay back the government. It’s an obvious ruse and I’m surprised that you haven’t reported that ruse. C’mon Barry?”

    is a good point. I was practicing me ‘justification’ skillz, in case 44′s admin. gives a ring..Not.

    I was using your post, as a foil, to launch a different idea..
    http://www.thefreedictionary.com/foil
    def. 2 #3

  18. proton says:

    Why is Goldman not paying off Buffett’s 10% preferred instead of TARP’s 5% preferred?

    If they can raise capital, they should first eliminate the costliest source of capital.

  19. mknowles says:

    GOLDMAN SACKS-USA

  20. dunnage says:

    Wake me when it is all paid back.

  21. moneyneversleepsblog says:

    @proton

    great point!!! I guess the answer is they would rather have Buffett as an investor over the gov’t. Buffett is passive and won’t restrict the comp. Plus it makes people feel good to have Warren in the stock. I wonder if they even have the option to pay back Warren, I’m sure he set himself up with a pretty sweet deal!

    http://moneyneversleepsblog.blogspot.com

  22. Anyone who does not boycott the sale is treasonous and deserves the full consequence of their actions

    I guess the answer is they would rather have Buffett as an investor over the gov’t.

    Because they’d rather see the money go away from taxpayers than to them. Even if it is a higher rate. Better to see the money stay within the circle then to let it get back to the riffraff

  23. natoK says:

    Why sell shares when the money shuffled through AIG is more than enough?

    Ah yes, I forgot its all about perception. That would be too obvious.