Goldman Sachs has long been known for its “black box” strategy. Investors can point to solid earnings and revenues, but reports show very little about how the company makes money.
When performances are solid, this peculiar disclosure strategy is commonly accepted. However, when GS fails to satisfy expectations, reactions can differ. A lot.
A recent article on Reuters shows how investors frustration has peaked following a 40% decline in bond-trading revenue.
Goldman CFO Marty Chavez said Goldman had trouble “navigating” the markets during a conference call to discuss second-quarter results on July 18, but did not offer specifics.
“You were left with reading about what ‘navigating the market’ means, and that doesn’t feel satisfying”, said Ian McDonald, a U.S. bank analyst at Janus Henderson, which owns 2.5 million Goldman shares. […] Seven investors who oversee a total of $3.3 billion in Goldman shares have told Reuters they are unsatisfied with management’s response so far.
From Reuters
Can we expect more disclosure in future or, as soon as performance at bond-trading unit will go back on track, Goldman will continue its tradition?
Short answer: No. Long answer: Fuck no.
Isn't it crazy how much it is a "what have you done for me lately" type of industry? Goldman's senior management is pretty much head and shoulders above their competitors. Pre crisis shareholders, including myself, owe Lloyd and co. some wiggle room. I do not think my shares would be in better hands with changes in management.
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