GS is cheap
what about some of the md's at GS buying back the company turning it into a private pate partnership a dropping their bhc status
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They want to be a holding company. Too big to fail --> implicit guarantee --> lower wacc. Good for business.
They are never going to go back to the private partnership model. Capital is way too cheap for them to go back to the days when Wall Street was deemed "boring."
How is GS cheap anyway brah. ~$60bn market cap? Not really feasible to do an MBO.
GS is big, but the shareprice is probably undervalued. They've been doing buybacks, so management clearly recognizes this. And if the partners wanted to do an mbo, they could probably pull it off. They might have to bring in some LPs, but GS is a sexy enough name that you could get some rich idiots to buy in.
TL;DR... No benefit of a take private/turning GS into a partnership... No incentive for the management do to so... Is it even theoretically possible to do it?
Long version... Interesting hypothetical... A few points spring to mind: - Would GS even survive without the bank holding company status? I doubt it. - Would being private give them any advantages in terms of new business lines, prop trading, cost of capital, financing, etc...? No. - Buybacks (my cynical point of view)... Management doing buybacks is a way for them to "signal" to the market that they think their prospects are good. They're doing it with the company's cash, not their own personal funds so it doesn't mean they "actually" think its a good use of money/a good idea, just a good signal to give the market. - How is GS undervalued? Give me a ball-park number/rationale.
Seems like a lousy idea even if they could pull it off... If their MDs are any good and want independence they'd set up their own firm(s), like Perella, Schwarzman, Quattrone, Moelis, etc... have done in the past... Not all bankers have the entrepreneurial streak, most are just employees/executives trying to make a good living... The CEOs/Management of the big banks lack the incentive to do anything drastic, they're very likely to make $10s of millions just staying the course and would have the option of maybe setting up their own firms/assuming other leadership positions after they leave/get kicked out (Corzine style...).
What do I know, I'm just a real estate guy.
how the fuck would you diligence gs? and I'm sure the pmds are itching to hand BX and DB the books so they can finance your proposed mbo.
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