The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Goldman stock is on the ropes, but should it be below book?

Analysts are reflecting uncertainty over the fallout for Goldman Sachs from the 1MDB affair, but with the stock taking a rare tumble below book value, markets seem to be pricing in much more bad news to come.

suit-business-fall-780



Ouch. There will be those who are gleefully watching as Goldman Sachs’ stock gets pummelled on the back of the firm’s 1MDB woes. There will be others looking on more nervously, hardly daring to whisper “there but for the grace of God go we”.

Rarely has Goldman taken a beating as quickly as it has in the past couple of weeks.

On November 8, the stock closed at $231.65. The next day saw the unsealing of a court filing that unleashed more details of the guilty plea of former Goldman banker Tim Leissner, who admitted in August that he had conspired with others to conceal facts related to the bank’s work for 1MDB from Goldman’s compliance and legal departments.

By the close on November 12, just two trading sessions later, it was down 11%. Since then the rot has continued: at the time of writing on Wednesday, it was 17% below that November 8 close.

It is now the worst-performing stock in the Dow Jones this year, down about 25%.

Significance

But the significance of the current level goes beyond the absolute price.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree