Goldman Sachs Mulls Multibillion Dollar Share Sale, WSJ Says

Goldman Sachs Mulls Multibillion Dollar Share Sale, WSJ Says


April 10 (Bloomberg) -- Goldman Sachs Group Inc. is considering a multibillion dollar share sale to help repay a $10 billion government loan, the Wall Street Journal reported, citing people familiar with the matter.

The New York-based company may make an announcement as soon as next week, according to the report. The Journal said the exact amount is yet to be decided and a final decision may depend on market conditions.

Sumiko Iwadate, a Tokyo-based spokeswoman for Goldman Sachs, declined to comment on the report. Lucas van Praag, a spokesman for the bank in New York, didn’t immediately return phone calls outside business hours.

Goldman Sachs stock has surged 47 percent this year after plunging 61 percent in 2008 amid the worst financial crisis since the Great Depression. Chief Executive Officer Lloyd Blankfein, who said last week that the past year has been “deeply humbling” for the banking industry, is due to report the company’s first-quarter earnings on April 14.

The company may sell about $5 billion in stock if it returns the government’s $10 billion in Troubled Asset Relief Program money, David Trone, an analyst at Fox-Pitt Kelton Cochran Caronia Waller, wrote in a note to investors March 27.

Banks including Goldman Sachs, which received its money as part of the first round of the program, are chafing under increased scrutiny that accompanied the bailout funds, as public outrage over bonuses and executive perks intensifies.

‘Stress Tests’

As earnings announcements loom for Goldman Sachs and its rivals, the U.S. Federal Reserve has told banks not to reveal results of “stress tests” being used to gauge their ability to weather the recession, people familiar with the matter said.

Leaks could push stock prices lower for banks perceived as weak and interfere with the government’s plan to release the results of the tests in an orderly fashion later this month.

Goldman Sachs, with $111 billion in cash and liquid securities, has fared better than rivals amid the crisis sparked by the meltdown of the U.S. mortgage market, the Journal said.

Once the most profitable firm on Wall Street, Goldman Sachs converted into a bank holding company in September.

Financial institutions have recorded almost $1.3 trillion in losses and writedowns since mid-2007, with more than 100 mortgage-industry companies folding in the worst housing market since the 1930s.

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