Was Goldman Sachs (GS) Passed Up for the Citigroup (C) Share Sale Due to its Image Problems?
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FOX Business Network's Charles Gasparino reported on Monday that Goldman Sachs' (NYSE: GS) weakened image may have kept the firm from being chosen to advise the massive government sale of its stake in Citigroup Inc. (NYSE: C).
Executives with the firm have debated what the impact its image will be on its bottom line. Last year the impact seemed to be insignificant, as Goldman Sachs recorded $12 billion in profits for 2009, but Gasparino said that the decision by the government to have Morgan Stanley (NYSE: MS) advise the Citigroup sale could paint a different picture for this year.
According to the report, this may give prospective investment-banking clients pause about their potential relationship with Goldman Sachs and worries may arise that other firms will be hired to avoid association with the firm.
While the bank did see solid profits last year, 2009 saw politicians criticize Goldman for its connection to the government that was seen by some to have had an advantage over failed firms like Lehman Brothers.
Goldman CEO Lloyd Blankfein did not make the image of his firm any brighter with his remarks that he was doing "God's Work" by conducting the firm's transactions, statements not to popular among the public.
If the trend continues to competitors like JPMorgan (NYSE: JPM) and Morgan Stanley receiving big deals instead of Goldman, it could hurt the firm's future bottom line.
While the deal allowing Morgan Stanley to advise the sale of 7.7 billion shares of Citigroup by the government will not yield much profit, the prestige will give the firm a selling point as the helping hand in the largest equity offering in history.
Executives with the firm have debated what the impact its image will be on its bottom line. Last year the impact seemed to be insignificant, as Goldman Sachs recorded $12 billion in profits for 2009, but Gasparino said that the decision by the government to have Morgan Stanley (NYSE: MS) advise the Citigroup sale could paint a different picture for this year.
According to the report, this may give prospective investment-banking clients pause about their potential relationship with Goldman Sachs and worries may arise that other firms will be hired to avoid association with the firm.
While the bank did see solid profits last year, 2009 saw politicians criticize Goldman for its connection to the government that was seen by some to have had an advantage over failed firms like Lehman Brothers.
Goldman CEO Lloyd Blankfein did not make the image of his firm any brighter with his remarks that he was doing "God's Work" by conducting the firm's transactions, statements not to popular among the public.
If the trend continues to competitors like JPMorgan (NYSE: JPM) and Morgan Stanley receiving big deals instead of Goldman, it could hurt the firm's future bottom line.
While the deal allowing Morgan Stanley to advise the sale of 7.7 billion shares of Citigroup by the government will not yield much profit, the prestige will give the firm a selling point as the helping hand in the largest equity offering in history.
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