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Non-Tech : Goldman Sachs Group Inc. NYSE:GS -- Ignore unavailable to you. Want to Upgrade?

To: Todd N who wrote (23)	5/3/1999 11:39:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 411

Goldman Sachs Shares Seen Priced Near Top of Range in IPO Today Todd: In case you missed this bit of news from Bloomberg. ============================== Bloomberg News May 3, 1999, 8:16 a.m. PT Goldman Sachs Shares Seen Priced Near Top of Range in IPO Today New York, May 3 (Bloomberg) -- Goldman Sachs Group Inc. shares are expected to be priced near $55 each in the investment bank's initial stock sale today. The firm plans to sell 60 million shares to the public, ending 130 years as a private partnership that became Wall Street's richest. If the shares are priced at the top of the firm's $45-to-$55 range, the sale will raise $3.30 billion, the second-largest IPO after Conoco Inc.'s $4.4 billion sale in October. The company would have a market value of $25.62 billion, about that of J.P. Morgan & Co., the fourth-largest U.S. bank. ''It's certainly going to go at the upper end,'' said David Menlow, president of IPO Financial Network. ''Anything other than the upper end may cause the investment community to have second thoughts about how strong the deal is.'' If demand is sufficient, Goldman could sell an additional 9 million shares, raising $3.8 billion. There's more than 10 times greater demand for shares than the maximum amount on sale, say people with knowledge of the sale. ''It's going to be a hot deal,'' said Steven Tuen, research director at IPO Value Monitor. He expects the shares to rise between 15 percent and 20 percent in their first trading Tuesday. Morgan Stanley Group Inc.'s public offering in March 1986 is an example of what can happen to a financial company's shares after an IPO. Morgan Stanley stock was priced at $56.50 a share and surged as much as 31 percent on the first day of trading. The firm then, like Goldman today, was a private investment bank that dominated Wall Street. (Morgan Stanley merged in 1997 with Dean Witter Discover & Co. to become Morgan Stanley Dean Witter & Co.) In Need of Upside Goldman isn't likely to sell its shares for the highest price it could get, analysts say. If the shares went for the top price investors were willing to pay, instead of within Goldman's pre-announced range, the shares might not rise much once they begin trading. That's because brokerage stocks, some up 30 percent or more this year, are already near records. Brokerage and investment bank shares were the best performing group in the Standard & Poor's 500 Index in the first quarter. In the last five trading days, though, they've fallen 8.6 percent, including 2.55 percent today, amid worries about strong economic growth, inflation and higher interest rates. Having Goldman stock perform well once it starts trading is important for morale, top officials have said. Goldman employees will be the biggest owners of stock. What's more, if Goldman were to set the price for its shares at more than $58.81, or almost 21 times its 1998 earnings, they would no longer sell at a discount to Merrill Lynch & Co., a bigger, more diversified competitor. Goldman isn't selling much of its stock to individual investors. Only those with accounts at Goldman, generally wealthy investors with a minimum of $5 million in assets, can buy the new shares. Pension funds, mutual funds and other institutional investors will get the rest of the offering.