Story of Goldman Sachs Based on Open Public Facts
Goldman Sachs is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Hong Kong, Tokyo, Dallas and Salt Lake City, and additional offices in other international financial centers. Goldman Sachs is the second largest investment bank in the world by revenue and is ranked 57th on the Fortune 500 list of the largest United States corporations by total revenue. It is considered a systemically important financial institution by the Financial Stability Board.
Goldman Sachs Portfolio
The company invests in and arranges financing for startups, and in many cases gets additional business when the companies launch initial public offerings. Notable initial public offerings for which Goldman Sachs was the lead book-runner include those of Twitter, Bumble, Robinhood Markets. Startups in which the company or its funds have invested include Spotify, Foodpanda, and Dropbox, among others.
Goldman Sachs Criticism
While the company has appeared on the 100 Best Companies to Work For list compiled by Fortune, primarily due to its high compensation levels, it has also been criticised by its employees for 100-hour work weeks, high levels of employee dissatisfaction among first-year analysts, abusive treatment by superiors, a lack of mental health resources, and extremely high levels of stress in the workplace leading to physical discomfort.The company has been criticized for a lack of ethical standards, working with dictatorial regimes, close relationships with the U.S. federal government via a “revolving door” of former employees, and driving up prices of commodities through futures speculation.
” Through ruthlessness, one Wall Street company managed to survive for more than a century. In this documentary, we learn about the rise and fall of an American finance empire. ” – FINAiUS
Financial Bail Out During Subprime Mortgage Crisis
As a result of its involvement in Securitisation during the Subprime Mortgage Crisis, Goldman Sachs suffered during the financial crisis of 2007–2008, and it received a $10 billion investment from the United States Department of the Treasury as part of the Troubled Asset Relief Program, a financial bailout created by the Emergency Economic Stabilisation Act of 2008. The investment was made in November 2008 and was repaid with interest in June 2009.
During the 2007 subprime mortgage crisis, Goldman profited from the collapse in subprime mortgage bonds in summer 2007 by short-selling subprime mortgage-backed securities. Two Goldman traders, Michael Swenson and Josh Birnbaum, are credited with being responsible for the firm’s large profits during the crisis.
The pair, members of Goldman’s structured products group in New York City, made a profit of $4 billion by “betting” on a collapse in the subprime market and shorting mortgage-related securities. By summer 2007, they persuaded colleagues to see their point of view and convinced skeptical risk management executives. The firm initially avoided large subprime write-downs and achieved a net profit due to significant losses on non-prime Securitised loans being offset by gains on short mortgage positions. The firm’s viability was later called into question as the crisis intensified in September 2008.
Goldman Sachs, the Wall Street investment bank, has a storied history. Founded by Marcus Goldman 150 years ago, his son Henry revolutionized the industry with company valuations and IPOs. It was the gold standard in investment banking for decades and partners got rich when the company went public. But the firm’s reputation took a beating during the financial crisis, eventually leading to one of the most interesting pivots in Wall Street history.
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