Wall Street's most prestigious investment house cancelled its planned float at the 11th hour in September after fears that the stockmarket crisis, which wiped 60 per cent off the value of rival securities firms, could spark global financial meltdown.
Now, with the New York stockmarket close to pre-crash highs, Jon Corzine, Goldman's head, is looking to push ahead with the IPO for fear that further delay could allow partners opposed to the firm ditching its partnership status to regroup. Morale, said insiders, has been badly hit by the decision not to go ahead, with rivals eagerly seizing on September's events as proof that the kings of Wall Street have lost their touch.
The embarrassment has been compounded by the fact that, with the markets having bounced back faster than was expected, other IPOs that were shelved in late September, such as the float of Rupert Murdoch's Fox TV, have been brought back successfully recently.
Since the decision not to go ahead, Mr Corzine's leadership has come increasingly under fire. Rumours of unrest continue to surface within the bank with John Thornton, a partner opposed to the IPO, and Jon Thain, the chief financial officer, being touted as replacements for Mr Corzine. The firm has also been hit by the decision of several older, more experienced partners to retire now rather than sit out what they fear will be a choppy time for the firm.
Mr Corzine, who is seeking to counter the drift, has spoken to colleagues about calling a full meeting of Goldman partners next May to approve a new IPO attempt. By that time he hopes that the markets will have stabilized sufficiently for the bank to have recovered its profitability after two bruising quarters.
One source said yesterday: "They were completely focussed on the float. Now that has not happened they do not know what to do."
Critics said that Goldman could have got its IPO away provided partners were prepared to accept a lower valuation. But sources close to Mr Corzine maintain that this would have been difficult. The bank reported a disappointing third quarter, and fourth quarter results, due soon, are believed to be worse.Reuse content