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The announcement of the penalty resulted in Goldman Sachs’ shares declining by 0.9% at the end of Friday trading. This follows a steady decline of 4.8% since a 6% increase from September 11 to 14. Overall, Goldman Sachs’ share price has dropped by 5.29% in 2023.
In addition to the fine, Goldman Sachs is also dealing with the fallout from its acquisition of fintech lender GreenSky. Purchased for $2.24 billion in an all-stock transaction in 2021, the lender is now expected to be sold for just $500 million. Advanced negotiations are reportedly underway with a consortium of investors including Sixth Street, Pacific Management Investment, and KKR.
The bank’s venture into consumer banking has resulted in $3 billion in losses, leading to a strategy shift back towards core business areas and a divestment of most unsecured consumer loans since last year. Its second-quarter earnings report showed an earnings per share of $3.08 compared to the expected $3.18, and an 8% decrease in revenue from the previous year at $10.9 billion.
Despite these challenges, Goldman Sachs has seen some success with several market debuts it has led recently, including the Arm IPO which boosted the British chip designer’s valuation to $65 billion. However, investor concerns remain as share prices of newly listed companies like Arm and Instacart have seen significant drops since their debuts.
As part of its cost-saving strategy, Goldman Sachs is planning another round of job cuts that could result in a 5% reduction in global headcount. This follows previous layoffs conducted by the bank in its efforts to achieve $1 billion in cost savings.
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