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Dick Bove: Dump Goldman Stock, Oust Blankfein

Dick Bove: Dump Goldman Stock, Oust Blankfein

By    |   Tuesday, 07 November 2017 02:21 PM

Economic guru Dick Bove has lowered his rating on Goldman Sachs Group Inc. to a "sell" and thinks CEO Lloyd Blankfein should be removed.

The bank's decision to exit its market-making role on derivatives exchanges, and its involvement with Venezuela, prompted the move, CNBC reported.

"I am not a fan of Goldman Sachs and have repeatedly expressed my concern about the company's leadership," the Vertical Trading Group analyst wrote in a note to clients.

"My problem is that Goldman never understood the changes in its core businesses and, therefore, continued to pursue its traditional business model when it was evident that this model was no longer relevant."

Bove earlier this year called for Blankfein's ouster amid a pattern of "bad judgment."

Goldman's market-making revenue has dropped from $29.7 billion in 2007 to $14.8 billion in 2017, according to Bove.

"What is being revealed by the business model errors and the Venezuelan activities is bad judgement," he wrote. "This bad judgment has led to 10 years of earnings weakness. This company has an insular management team that sees itself as a partnership. It is not. It is a publicly owned company that, in my opinion, needs outside blood to change its direction."

For its partm Goldman is ramping up its private-equity investments and going after smaller, high-growth targets as part of a broad plan to offset recent trading declines, three people familiar with the effort told Reuters.

Goldman’s investment bank, which typically focuses on advising large companies on mergers and raising capital, is now looking to use Goldman’s own funds to finance a handful of small, promising companies in the near-term, the people said.

The initiative is led by senior investment banker Kathy Elsesser, who earlier this year took on the project in addition to her role as global chair of consumer, retail and healthcare investment banking. She will be responsible for looking for deals in these sectors.

The goal is to repeat Goldman’s past success with early-stage investments in tech companies such as Uber Technologies Inc. The latest effort, however, would target industries outside of Silicon Valley, said the people, who declined to be named because the strategy they were discussing was not yet public.

It is one of several initiatives Goldman has launched to add $5 billion to annual revenue after a slump in bond trading. Among those are efforts to lend more, come up with creative deals to pitch to big clients, and convince more corporations and investors to trade with Goldman Sachs.

(Newsmax wire services contributed to this report).

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Economic guru Dick Bove has lowered his rating on Goldman Sachs to a "sell" and thinks CEO Lloyd Blankfein should be removed.
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Tuesday, 07 November 2017 02:21 PM
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