Goldman plans online underwriting
By Bloomberg News
Special to CNET News.com
April 12, 1999, 9:40 a.m. PT
Goldman Sachs said it started GS-Online, an Internet-based service for underwriting stocks over the Web.
GS-Online will work with other securities firms that underwrite securities, rather than with the public, Goldman said in documents filed with the Securities and Exchange Commission for its proposed $3.8 billion initial share sale.
"This trend toward alternative trading systems will continue and perhaps accelerate,'' Goldman said. It also said it's invested in electronic commerce companies including Bridge Information Systems, TradeWeb , Archipelago, Brut, Optimark Data Systems, and Wit Capital to "gain an increasing understanding of business developments and opportunities in this emerging sector.''
Goldman and other traditional securities firms are grappling with the rise of online trading, which now accounts for one in seven U.S. stock trades and has doubled to 440,000 trades daily in the past nine months, according to Credit Suisse First Boston. At $50 billion, Charles Schwab,the biggest online broker, is now worth more than Merrill Lynch, Bears Stearns, and Lehman Brothers combined.
Goldman's offering would value the firm at $25.6 billion. Associating itself with the Internet could help boost Goldman's IPO valuation, said Scott Appleby, analyst with ABN Amro.
"They made these investments not only to learn about the Internet but to also show that they are on the Internet,'' he said. Still, Goldman and other investment banks "are threatened by the Internet, and have to come to terms with that.'' |
