Did you know that Goldman Sachs dumped 44% of its shares in BP Oil during the first quarter? According to a post at Raw Story:Posted on 06/04/2010 6:47:11 AM PDT by patriotgal1787
Did you know that Goldman Sachs dumped 44% of its shares in BP Oil during the first quarter? According to a post at Raw Story:
Goldman Sachs sold 4,680,822 shares of BP in the first quarter of 2010. Goldman’s sales were the largest of any firm during that time. Goldman would have pocketed slightly more than $266 million if their holdings were sold at the average price of BP’s stock during the quarter.At the same time...If Goldman had sold these shares today, their investment would have lost 36 percent its value, or $96 million. The share sales represented 44 percent of Goldman’s holdings — meaning that Goldman’s remaining holdings have still lost tens of millions in value.
The sale and its size itself isn't unusual for a large asset management firm. Wall Street brokerages routinely buy and sell huge blocks of shares for themselves and their clients. In light of a recent SEC lawsuit arguing that Goldman kept information about a product they sold from their clients, however, the stock sale may raise fresh concern among Goldman's critics. Goldman is also a frequent target of liberals and journalists, including Rolling Stone's Matt Taibbi, who famously dubbed the firm a "vampire squid."
Others also sold stock
Other asset management firms also sold huge blocks of BP stock in the first quarter -- but their sales were a fraction of Goldman's. Wachovia, which is owned by Wells Fargo, sold 2,667,419 shares; UBS, the Swiss bank, sold 2,125,566 shares.Wachovia and UBS also sold much larger percentages of their BP stock, at 98 percently and 97 percent respectively.
Wachova parent Wells Fargo, however, bought 2.3 million shares in the quarter, largely discounting Wachovia's sales.
Those reported buying BP's stock included Wellington Management, a large asset firm, and the Bill and Melinda Gates Foundation.
BP is struggling to cap a massive oil leak at one of its drill sites in the Gulf of Mexico. The firm's myriad safety violations over the years have come to light in lieu of the Gulf disaster.
BP traded on average at $56.86 in the first quarter, according to GuruFocus, a site that monitors the major trading moves of prominent investors. A list of major institutions' sales of BP stock are available at the market research website Morningstar.
It's certainly unknown as to why the firms sold their holdings. In its analysis of the company in mid-March, Morningstar, the market research site, gave the company an average rating of three out of a possible five stars.
"BP's valuation carries more uncertainty than ExxonMobil's or Shell's because the firm is less integrated, with more of its earnings coming from the [exploration and production] business than from potentially offsetting refining operations," the site's analyst wrote. "Like its peers, a sustained drop in oil and gas prices can hurt upstream earnings. Lower crude-oil feedstock costs could help refining margins, but refined product pricing lags could quickly swing refining profits to losses. BP's global business faces potential disruptions caused by political risks, particularly with its heavy exposure to Russia. Disruptions caused by environmental and operational constraints could further limit earnings potential."
The transnational oil company, like other energy giants, was hit with lower oil and gas prices in the past year after the price of oil surged in 2008.
"BP's fourth quarter marked another quarter of year-over-year production gains, with a 3% increase thanks to new field startups," Morningstar's analyst wrote in another note, after BP turned in better than expected fourth quarter results in February. "BP reported fourth-quarter replacement cost profit of $3.4 billion, up 33% from year-ago earnings of $2.6 billion, as upstream earnings growth was more than enough to offset downstream weakness. For the full year, BP's earnings of $14 billion were 45% below year-ago earnings of $26 billion, in part because of lower oil prices earlier in the year. We're encouraged by BP's sequential earnings gains as new projects and cost-cutting efforts drive upstream results."
The SEC filed a civil lawsuit against Goldman Sachs and one of its vice presidents in April, asserting that the firm had committed fraud by misrepresenting a mortgage-investment product inherently designed to fail. The company helped a hedge fund trader create a mortgage investment that gained value as mortgage borrowers defaulted en masse.
In response, Goldman said the SEC's charges were “completely unfounded in law and fact” and averred that it would “vigorously contest them and defend the firm and its reputation.”
The firm has also faced criticism over giant bonuses paid to staff amidst the US financial crisis. Goldman reduced the sizes of its staff bonuses this year to $16.9 billion, and said it would pay its chief executive $9 million, far less than the previous year.
Goldman also announced it would create a $500 million program to help small businesses. Critics noted that the figure represented just 3% of the bonus pool.
CNN News reported that Obama is using the crisis to push his “energy initiative,” aka Global Warming Carbon Tax.
The president also used the oil spill crisis in the Gulf of Mexico to advance his alternative energy agenda Wednesday, calling it a warning that America needs to transition away from dependence on fossil fuels.There is no mention of tapping vast oil reserves on land. We could not locate a story on the BP Stock sale on their web site.“The catastrophe unfolding in the Gulf right now may prove to be a result of human error — or corporations taking dangerous shortcuts that compromised safety,” he said.
“But we have to acknowledge that there are inherent risks to drilling four miles beneath the surface of the Earth — risks that are bound to increase the harder oil extraction becomes. Just like we have to acknowledge that an America run solely on fossil fuels should not be the vision we have for our children and grandchildren.”
The sale of stock just prior to the spill has led some to allege that Goldman Sacs knew of the pending “accident” that caused the oil spill. The “accident” would give added public opinion for the cap-and-trade bill proposed by Kerry and others.
Interesting.
Considering the administration, I would have dumped shares as well. Not exactly an oil-friendly administration and in 1Q they were playing games with the “we’ll let you drill off shore but we won’t” statements. Logical move, I don’t see a conspiracy.
Goldman is in league with the North Koreans who torpedo’ed the pipe and caused the leak in the first place. This was all to take the spotlight of the most recent Van Der Sloot killing in Peru, as we all know Van Der Sloot is the illegitimate child of Ted Kennedy and brother to Obama (also Kennedy’s illegitimate child). By golly, I think you’d cracked the code!
Well we know what Obama did with Britain’s leaders. Why wouldn’t he put British oil out of business.?
So it held on to 56%. That's not much of a conspiracy.
Is this the Friday Silly thread or the Thursday Retarded ?
Typical Obie strawmen...
I haven't heard anyone deny the risks, just as I haven't heard anyone of any consequence propose anything but an "all of the above" approach.
However, his own stinking policies demand we drill in deeper waters and his own stinking appointees refuse to ensure BP mitigate those risks.
He simply makes me sick.
I think we are witnessing something truly Apocalyptic without fully realizing it.
omg
(Just trying to he'p out a little by tying up the loose ends in these seemingly disparate conspiracy theories)
This plot certainly thickens
Driving across Pennsylvania, I came across a huge ethanol plant with BP signage.
Goldman is in league with the North Koreans who torpedo’ed the pipe and caused the leak in the first place. This was all to take the spotlight of the most recent Van Der Sloot killing in Peru, as we all know Van Der Sloot is the illegitimate child of Ted Kennedy and brother to Obama (also Kennedy’s illegitimate child). By golly, I think you’d cracked the code!
For a minute there, I thought you were serious -- as these days on Free Republic, it's hard to tell one way or another ... LOL ...
Heck! You might even be coming back on my post and telling me you're serious, too ... :-)
Why mock it? It is possible GS heard of problems with the well, that it was spitting up gas, and decided it was best to limit its exposure during the most critical time: the change from exploration to production.
Anyone who has half a billion dollars invested in a company is going to keep a pretty close eye on potential problems.
Then why not sell it all? Or at least the majority of the shares, why sell a minority and keep the majority? It doesn’t make sense from a risk mitigation standpoint which is why i think its hogwash.
They didn’t sell a little bit. They sold a large chunk of their position—43.7%. That is a major move. A reason for not dumping everything, if GS did know of problems with the well, is obvious: uncertainty. Might be a serious problem there, might not. They didn’t know what would happen but suspected something might. They weighed it.
Nothing odd about any of this. I get suspicious when people start making the case a “conspiracy” is being alleged and mock those who express interest in the dumping of shares by GS. That makes me think there might be something more than just a prudent business move motivated by publicly available information.
What is most damning from the information available now is not that GS sold so much of its BP holdings but that it moved BP from a “Neutral” to a “Buy” just before it dumped over a quarter of a billion dollars worth of BP stock. That is scummy. Absolutely scummy. But that is what GS is known for so I guess anyone who got suckered had it coming.
True, anyone buying or selling based on analyst estimates on the street is just asking to get suckered. But no, if they knew something about the well they would have sold the majority of shares and maintained the minority to hedge. If they were really so blood sucking as to know about the well before hand why would we think they wouldn’t squeeze every cent of profit out of the deal?
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