rumours that Goldman Sachs is planning to announce a new secondary equity offering are rampant this morning. Goldman’s shares, which were diluted just six weeks ago by an offering that coincided with a sale of a convertible preferred stake to Warren Buffett, were are trading down around 10% this morning.
Just six weeks ago, Goldman surprised investors by announcing it had sold $5 billion of expensive convertible preferred to Warren Buffet. The firm also increased a common stock offering Wednesday to $5 billion at $123 a share, an increase from the original $2.5 billion offering announced earlier. Those new shares are now deeply underwater.
Goldman recently received an additional $10 billion from the Treasury Department’s capital purchase program, handing over another tranche of preferred stock. Goldman’s market cap is just $8 billion more than the total amount of new money it has taken in since September.
The secondary offering rumours are, of course, totally unconfirmed. CNBC’s David Faber said earlier this morning that he doesn’t believe that Goldman has plans for a secondary. Barclays today cut its estimates on Goldman, which can’t be helping either.
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