Goldman files for $30bn flotation with SEC
Tuesday 25 August 1998
The firm will begin marketing for the listing in October and come to the market in New York in November.
According to figures disclosed in the document Goldman proprietary trading accounted for $2.58bn, or 47 per cent of the firm's $5.46bn net revenue in the first six months of the year.
That appears to be a far higher percentage than its closest Wall Street rivals, suggesting the firm is more vulnerable to a sharp market downturn than its competitors.
Morgan Stanley Dean Witter made $2.17bn, or around 30 per cent of its profits from own book trading. Asset management, where Goldman wants to expand, accounted for $1.3bn of revenues in the first half while investment banking accounted for $1.59bn.
In the year ended November 1997, Goldman made net revenue of $7.5bn, 39 per cent of which was earned from proprietary trading.
According to the filing, Goldman intends to use float to bolster its pre-eminent market position by expanding profitable areas like asset management and building up its expertise.
The filing contains no details about the existing ownership structure or how the shares will be shared out between staff. Headhunters are targetting Goldman Sachs staff in an attempt to exploit the uncertainty about who will benefit most from the flotation.
Sources inside the bank say that headhunters are trying to prise staff away by playing on fears that they have lost out in the share allocation due to be announced within the next few weeks.
"They have been telephoning staff and saying they've heard that they haven't done as well as so-and-so, and would they like to move?" said one insider.
Staff have been deliberately kept in the dark about the float.
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