Goldman Sachs, who Matt Taibbi of Rolling Stone memorably called a, “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” is back up to its old tricks.
The day before Apple released its quarterly earnings report, lost $60 billion in market value and fell behind Exxon Mobil as the most valuable company, Goldman Sachs sold $30 million worth of structured bonds tied to Apple's stock performance.
The same day, Bill Shope, Goldman's Apple equities specialist, was predicting company shares would hit $760 in 2013. Two days later and a day after the earnings report, he revised his target down a whopping 20% to $600.
Unlike the housing bubble and collateralized debt obligations fiasco Taibbi referred to, there is at least some semblance of plausible deniability, whether by chance or design.
According to a Goldman Sachs spokesperson, the securities department that managed the sale is completely “walled off” from the research department for which Shope works.
As you can imagine, there is no word on whether there was any upper management knowledge or oversight of the conflicting research and securities department actions.
The securities were issued on January 22nd with a 10% per year yield, plus any gains of the stock up to 11.25% based on a share value of around $505. If Apple dropped, the notes provide no protection against losses.
Whoever bought the securities suffered through the 8% drop in share prices within two days and Goldman Sachs made $30 million betting against its own guidance. It looks like risk just happened to be perfectly managed with uncanny timing, if that can be believed.
No comments:
Post a Comment