{"id":398179,"date":"2022-01-23T05:54:51","date_gmt":"2022-01-23T02:54:51","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/goldman-sachs-ceo-david-solomon-playing-it-cool-with-mergers\/"},"modified":"2022-01-23T05:54:51","modified_gmt":"2022-01-23T02:54:51","slug":"goldman-sachs-ceo-david-solomon-playing-it-cool-with-mergers","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/goldman-sachs-ceo-david-solomon-playing-it-cool-with-mergers\/","title":{"rendered":"#Goldman Sachs CEO David Solomon playing it &#8216;cool&#8217; with mergers"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a25381d52eca\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a25381d52eca\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/goldman-sachs-ceo-david-solomon-playing-it-cool-with-mergers\/#Tough_competition\" >Tough competition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/goldman-sachs-ceo-david-solomon-playing-it-cool-with-mergers\/#Sensible_%E2%80%98Fink_think\" >Sensible \u2018Fink think\u2019<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Goldman Sachs CEO David Solomon playing it &#8216;cool&#8217; with mergers<\/strong>&#8221;<\/p>\n<div>\n<aside class=\"single__inline-module alignleft\">\n<div class=\"inline-module inline-module--columnist inline-module--author\">\n<div class=\"inline-module--author__img\">\n            <img decoding=\"async\" width=\"76\" height=\"69\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76&amp;h=69&amp;crop=1\" class=\"attachment-nyp_columnist size-nyp_columnist\" alt=\"Charles Gasparino\" loading=\"lazy\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=152 152w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=114 114w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76 76w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=38 38w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png 706w\" sizes=\"auto, (max-width: 76px) 100vw, 76px\"\/>      <\/div>\n<\/div>\n<\/aside>\n<p>Goldman Sachs has been looking to do a big deal, or what investment bankers call \u201ctransformative,\u201d for years now. So what are they waiting for? People there keep telling me they need asset prices of merger partners to \u201cnormalize,\u201d aka fall enough so Goldman remains in control of the combined company.\u00a0<\/p>\n<p>Well, we\u2019re starting to see some \u201cnormal.\u201d\u00a0<\/p>\n<p>A look at the asset prices of potential partners \u2014 PNC Bank, US Bancorp, State Street, BNY Mellon, some mid-sized asset managers and even potentially brokerage firm Charles Schwab &amp; Co. \u2014 are starting to come back to earth as the Fed begins raising interest rates.\u00a0<\/p>\n<p>Another factor that might force CEO David Solomon\u2019s hand are the obvious holes in Goldman\u2019s business model. Goldman has a long and storied rep, killing it in M&amp;A and trading.\u00a0<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tough_competition\"><\/span>Tough competition<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>But it\u2019s tough having only two horses in the race competing against banking behemoths like JPMorgan. Sure, Goldman wasn\u2019t the only bank to experience a hiccup because of trading volatility and higher expenses (the vaunted JPM did as well). But JPM has a big balance sheet, far larger than the size of Goldman\u2019s, and JPM CEO Jamie Dimon can paper over surprises such as rapid and unexpected increases in compensation costs, which bedeviled Solomon in the fourth quarter of 2021 and possibly into 2022.<\/p>\n<p>That\u2019s why Goldman\u2019s earnings miss last week has the Wall Street rumor mill spinning again.\u00a0<\/p>\n<p>Solomon also knows that if you\u2019re Goldman, the merger has got to be the right one, or else the CEO will go down in infamy as having evaporated one of the world\u2019s greatest corporate brands.\u00a0<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"683\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Jamie-Dimon-3.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"Jamie Dimon, CEO of JPMorgan Chase \" class=\"wp-image-20932794\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Jamie-Dimon-3.jpg?quality=90&amp;strip=all&amp;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Jamie-Dimon-3.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Jamie-Dimon-3.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>JPMorgan Chase CEO Jamie Dimon is definitely not in the market for mergers or acquisitions.<\/figcaption><figcaption><span class=\"credit\">REUTERS\/Carlo Allegri\/File<\/span><\/figcaption><\/figure>\n<p>And this is where it gets tricky. As for potential partners, Schwab \u2014 the world\u2019s most prestigious discount broker \u2014 would be an obvious choice. Schwab\u2019s business involves registered investment advisers selling high-end financial products to rich people, which complements Goldman\u2019s own very high-end wealth-management business.<\/p>\n<p>But Schwab\u2019s price, in Goldmanese, hasn\u2019t been normalized enough. The San Francisco-based Schwab has a market value of $168 billion compared to Goldman\u2019s $115 billion. Charles Schwab\u2019s ego \u2014 and yes, the company\u2019s 84-year-old founder, namesake and chairman is still around \u2014 won\u2019t let him sell out a bunch of traders in New York if he doesn\u2019t have to.\u00a0<\/p>\n<p>Both PNC and US Bancorp have lower market caps than Goldman and they would be attractive, particularly in a high-interest-rate environment the Fed has signaled; banks make a lot of money when rates rise.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Charles-Schwab.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"A view of the Charles Schwab office location in Manhattan, New York, U.S., November 15, 2021. \" class=\"wp-image-20932813\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Charles-Schwab.jpg?quality=90&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Charles-Schwab.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Charles-Schwab.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Brokerage firm Charles Schwab is too big of a behemoth to possibly partner with Goldman Sachs.<\/figcaption><figcaption><span class=\"credit\">REUTERS\/Andrew Kelly<\/span><\/figcaption><\/figure>\n<p>But, like Schwab, neither has to do a deal. The monetary-policy environment favors their business model over Goldman\u2019s.\u00a0<\/p>\n<p>Asset managers that might be available \u2014 think T. Rowe Price \u2014 would get Solly around $1.5 trillion in assets and entry into the lucrative mutual-fund business.<\/p>\n<aside class=\"single__inline-module alignright\">\n    <\/aside>\n<p>Ask yourself, though: Why \u00adhaven\u2019t there been more marriages between fund companies and Wall Street? Answer: Combining those cultures is a little like trying to get Hillary Clinton to play nice with Donald Trump.<\/p>\n<p>With all these variables to weigh, the conventional wisdom among bankers is that Goldman isn\u2019t rushing to do anything. Solomon is doing a great job; he\u2019s beat earnings expectations seven times before the recent fourth-quarter 2021 miss. Some analysts say his stock looks cheap compared to competitors like Morgan Stanley, but Goldman has the edge in market prowess.\u00a0<\/p>\n<p>That\u2019s one way to look at it; another way is the reason why Morgan Stanley beat fourth-quarter expectations: It has a huge wealth-management business that stabilized and papered over a trading slowdown.\u00a0<\/p>\n<p>Again, Solomon and his people are smart. They know they have to do a deal and the right one at the right time.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Sensible_%E2%80%98Fink_think\"><\/span>Sensible \u2018Fink think\u2019<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Larry Fink\u2019s annual letter to CEOs is always must-read material, this year even more so because he added a fair amount of common sense to the relentless push by the Biden administration and corporate America to adopt green-energy policies.<\/p>\n<p>Fink, the CEO of BlackRock, is no stranger to this effort. He\u2019s used his clout as chief of the world\u2019s largest money-management firm ($9 trillion in assets) to prod companies to adopt policies that he believes will transition the country and the world to what\u2019s known as \u201cnet zero\u201d carbon admissions.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"683\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Larry-Fink.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"Larry Fink, chief executive officer of\u00a0BlackRock Inc\" class=\"wp-image-20932824\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Larry-Fink.jpg?quality=90&amp;strip=all&amp;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Larry-Fink.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/Larry-Fink.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>BlackRock CEO Larry Fink has plenty of footprints influencing the Biden administration.<\/figcaption><figcaption><span class=\"credit\">Bloomberg via Getty Images<\/span><\/figcaption><\/figure>\n<p>With that came criticism from conservatives, and this column, since BlackRock alumni fill the Biden White House. Yes, green energy sounds good in practice, and Teslas are very popular in Beverly Hills, but working-class Americans can\u2019t afford electric cars. Higher oil and gas prices are tax increases on Middle America.<\/p>\n<p>Fink didn\u2019t back off his embrace of green energy. But in the letter, he also pointed out how this movement is being hijacked by environmental zealots.<\/p>\n<p>He advocated for a transition that takes into account that \u201cany plan that focuses solely on limiting supply and fails to address demand for hydrocarbons will drive up energy prices for those who can least afford it, resulting in greater polarization around climate change and eroding progress.\u201d<\/p>\n<p>Let\u2019s hope his friends in the Biden administration are listening.\n                        <\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/nypost.com\/2022\/01\/22\/goldman-sachs-ceo-david-solomon-playing-it-cool-with-mergers\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Goldman Sachs CEO David Solomon playing it &#8216;cool&#8217; with mergers&#8221; Goldman Sachs has been looking to do a big deal, or what investment bankers call \u201ctransformative,\u201d for years now. So what are they waiting for? People there keep telling me they need asset prices of merger partners to \u201cnormalize,\u201d aka fall enough so Goldman remains&#8230;<\/p>\n","protected":false},"author":1,"featured_media":398180,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/01\/David-Solomon.jpg?quality=90&strip=all&w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[124625,71069,71920,77318,70789,100568,70790,70552,70791,70792,70584,73986,70360],"class_list":["post-398179","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-1-22-22","tag-blackrock","tag-carbon-emissions","tag-charles-schwab","tag-david-solomon","tag-gas-prices","tag-goldman-sachs","tag-interest-rates","tag-jamie-dimon","tag-jpmorgan-chase","tag-mergers-acquisitions","tag-morgan-stanley","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/398179","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=398179"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/398179\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/398180"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=398179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=398179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=398179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}