Tuesday, November 11, 2008

Goldman's Travails: Rumours and Reality

From FT Alphaville:

Persistent rumours — and some more hard evidence - of deepening difficulties at Goldman Sachs are fuelling debate over whether the investment bank will attempt another fund raising ahead of its fourth quarter results next month. The shares hit a five-year low, down 8.5 per cent to $71.21, on Monday after analysts at Barclays became the latest to forecast a Q4 loss for Goldman, citing in part its exposure to private equity. They were already diluted just six weeks ago by an offering that coincided with a sale of a convertible preferred stake to Warren Buffett, as John Carney notes on Clusterstock.

Now, we hear in Tokyo that Goldman executives recently approached Nippon Life, one of Japan’s biggest institutional investors, and separately, Mizuho Bank, about whether they would invest in the bank. Mizuho apparently went as far as taking a (half-hearted) look at Goldman’s books but quickly lost interest. Nippon Life didn’t call back, we gather. The approaches came after Goldman in September held talks with Sumitomo Mitsui Financial Group about a possible investment - another attempt that has so far gone nowhere.

As Carney notes, the secondary offering rumours are, of course, totally unconfirmed. CNBC’s David Faber said Monday morning that he doesn’t believe that Goldman has plans for a secondary. But Barclays cut to estimates on Goldman can’t be helping either....MORE