NEW YORK, Feb 20 — For months, the watercooler chatter around big Wall Street banks focused on whether Goldman Sachs Group Inc would finally pursue a major deal. Instead, Goldman’s top rival beat it to the punch. Yesterday, Morgan Stanley said it plans to acquire E*Trade Financial Corp for...
Instead of opening its own wallet to expand, Goldman is trying to grow a fledgling retail bank, create a treasury-services business, and expand in asset management, corporate lending and trading — largely all from the ground up. — Reuters pic
It also underlines Goldman’s position as an outlier as the only big US bank to not do any transformative deals during or since that time. Unlike Morgan Stanley, JPMorgan Chase & Co or Bank of America Corp, which all executed major transactions during or after the crisis, Goldman looks much the same, analysts say.
Morgan Stanley’s stock fell 4 per cent yesterday after announcing the deal, which will dilute its shareholders by 10 per cent. Goldman was down 1 per cent. Goldman’s share price as of yesterday's close was 1.1 times its stated tangible book value as of the fourth quarter compared with 1.3 times tangible book value for Morgan Stanley.
“Goldman Sachs has, historically, been a build-up-themselves organisation as opposed to making acquisitions,” McTamney said. Now there will be more questions from investors about whether acquisitions are needed, he said.Associates say that Solomon is staking his legacy on turning Goldman into a global, full-service financial services firm that can compete with rivals.
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