Rumors continue to swirl that things are getting pretty ugly for Goldman Sachs Group Inc. ahead of the former investment bank's fourth-quarter earnings announcement. Now, some analysts are forecasting a fourth-quarter loss that could top $600 million and the laying off of thousands. Goldman's shares are sinking fast (they hit a five-year low Monday), and now speculation that the bank will raise more capital are popping up as well, according to a post on FT Alphaville.
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Such a move would be the third capital injection for Goldman in six weeks time, and it would likely come as an unwelcome surprise to shareholders who just saw themselves diluted by the sale of convertible stock to Warren Buffett.
Word is that Goldman's brass recently approached Japanese financial firms Nippon Life Insurance Co. and Mizuho Bank, on a separate basis, about taking a stake in the bank. However, talks with both reportedly went nowhere.
Still, its difficult to see Goldman raising more money on top of the $5 billion it raised from Buffett, the $5 billion it sold in common stock and the $10 billion it received from Uncle Sam. That comes to $20 billion in less than two months time into the coffers of a bank with a market capitalization of $28.8 billion. - George White
See FT Alphaville post
See Dealscape post on Goldman layoffs
See Forbes story on Goldman's 4Q losses
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