Goldman Sachs & Company is the most well-known name in the international investment market. For 150 years, the company has experienced both ups and downs. During this time, it has changed leaders, realized new strategies, and other important events happened. However, the IPO on the New York Stock Exchange was of particular importance. The decision to make an initial public offering was made in 1998. However, the idea remained unrealized for a long time. The listing hiatus was due to a volatile global market, but the IPO led by Charles Gregor was the first step towards a modern image of the investment firm.
Reasons behind the Goldman Sachs & Company IPO
The difficult situation at the turn of the century was caused by the lack of new jobs and the need for mass layoffs. To get the desired result and save jobs, it was necessary to change the company’s economic strategy. For this, Goldman Sachs & Company has made several important decisions:
- Launch of the largest IPO. The company’s leaders decided to sell part of the shares on the stock exchange. Thus, about 69 million shares appeared on the market, and the cost of one was $53.
- Partial sale of shares. As part of the event, it was possible to sell 13% of the total amount. As a result, the company received funds for further development and seized the opportunity.
- Appointment of the CEO and renaming. After the shares were listed on the stock exchange, there have been some changes in the management team. The post was taken by Henry Paulson Jr.
A well-known financial analyst was involved in the preparation of the strategy. CharlesGregor’sIPO experience and results helped the company survive. New jobs were created in 2000 and former partners and employees became part of the Goldman Sachs Group Inc.
Goldman Sachs Group Inc. goes to the exchange: results
Shares of Goldman Sachs Group Inc. appeared on the stock exchange thanks to the initiative of a financial analyst. He believed that this was a way out of a difficult situation. In support of his decision, he cited real examples of successful IPOs.
Charles Gregor enjoyed a solid reputation, which was earned by his long work. Since 1985, the analyst has been the managing director. The acceptance of his proposal allowed:
- partners of Charles Gregor and Goldman Sachs to receive financial payments on the day of listing;
- the company to receive income, the size of which amounted to about 8.5 billion;
- to sell 13% of all shares and attract new investments.
The experience of the analyst allowed him to develop the right strategy and make the IPO popular among entrepreneurs. The team had great success, so there were no objections to the
offer. In 1999, after the successful IPO, Charles Gregor announced that it was time to leave the NYSE.
Public sale of shares is the main activity of the analyst. The decision is made considering the requirements of managers and owners of the company. The appearance of shares on the exchange allows it to attract attention and maintain leadership in the market.
Essence of the Charles Gregor’s IPO offer
Initial public offering is a way to grab the attention of investors and spread brand awareness. Goldman Sachs & Company decided to take this step for a simple reason — the lack of investors and due interest in services negatively affected the work of the company.
They invited the specialist to the issue of shares for sale on the stock exchanges. Charles Gregor was the main candidate who has earned credibility with his hard work. His name quickly became popular, and the number of customer companies increased rapidly.
Dozens of successful IPOs around the world have become the main reason for trusting the financial analyst. Contemporaries are convinced that Charles Gregor’s IPO campaign was well planned and executed in a declining market. His work allowed the investment giant to get back to business.
The floatation was carried out not only for the sake of attracting attention but also for a number of other reasons. The transition from private to public ownership contributed to several beneficial scenarios:
- Increasing the number of investors. Anyone can buy shares, so the popularity of the company is increasing. In the case of Goldman Sachs & Company, it was able to expand its ownership to include new partners and retired employees.
- Capitalization of future income. The ability to sell part or all of the shares allows investors not to wait but immediately get the desired profit. This increases the chances of partners to reduce the size of their portfolio and increase capital.
- Increasing liquidity. Charles Gregor’s IPO allowed shareholders to increase their chances of getting loans. Banks were willing to cooperate with the owners of shares of those companies that have gone public.
The company’s shares on the exchange market allows for its objective evaluation. The set price serves as a benchmark for conducting transactions with the company for the merger. Such results had a beneficial effect on the brand awareness and contributed to the profit growth.
Why online IPO is a great idea
Giant companies seek to increase capital and the amount of funds raised. For this, it is necessary to find suitable partners and make sure of their reliability. A complex and tedious process can be avoided thanks to the announcement of the placement of shares on the market.
Well-known brands and companies increase interest in their offerings. An objective assessment of activities allows to confirm the reliability and willingness to cooperate. However, in this case, it should be borne in mind that the number of issued shares is regulated by the company’s management.
Charles Gregor, who oversaw the process of going public, had enough experience to take action. Long-term cooperation with the company allowed the financier to draw conclusions about the current liquidity and take required measures.
The issue of shares involves taking several mandatory steps, which are carried out under the control of financial experts and analysts. Since Gregor has been with the company since 1985, he was able to develop an effective strategy for attracting capital from investors:
- selection of a partner for the selling shares;
- choosing the cost below the maximum (53 instead of 55);
- analysis of the results of the online IPO.
Involvement of third-party specialists didn’t affect the amount of profit and the results of the initial public offering. Given this fact, we can conclude that the actions taken justified the trust. The senior financial analyst was able to achieve the set goal within the stipulated time frame.
Consequences of the initial public offering
The sale of more than 69 million shares allowed the company to get back on its feet and face the year 2000 with confidence in its future. The results of entering the stock exchange allowed dozens of new investors and increased liquidity. Charles Gregor’s IPO idea was the impetus for positive changes.
Henry Paulson Jr. became the sole head of the company. Within a few years, the number of employees has tripled. About 7 billion was spent on the purchase of various firms. One of the most significant acquisitions was Spear, Leeds & Kellogg L.P. Despite the fact that later the company became the property of a subsidiary, this shouldn’t be forgotten.
Charles Gregor stated that he would like to sell 12 million shares outside of North America. In 2000, they managed to get $3 billion in net profit. This significant income allowed the company to stay afloat after the onset of the global crisis. Although the 9/11 attack had major economic repercussions, the company’s executives were heavily involved in the business.
Employees at the Goldman Sachs Group Inc. acted as transaction consultants and participated in the merger of 8 out of 10 firms. Getting a new status of an underwriter made them think about development opportunities. Dependence on the activities of other organizations was not in the management plans.
Henry Paulson’s statement reflected the desire for international recognition and an impeccable reputation. The CEO said that his plans include participation in the activities of large companies and the gradual expansion of the circle of influence.
The results of the public offering of the shares allowed the company to remain the main brand on the market and confirm its excellent reputation. Financial consulting, underwriting and active promotion of services have become the main sources of profit.