Goldman Sachs chief executive David Solomon has insisted the bank can persuade investors to assign a higher value to its stock, although he warned it may take time and the Wall Street group will not always perform as strongly as it did in its most recent blowout quarter.
In an interview with the Financial Times, Solomon declined to give a timeframe for closing the valuation gap versus its megabank peers.
“I don’t focus on what the time period will be. I just know that if we keep growing the firm and delivering on our plan over time, the stock and the valuation will take care of itself and we’ll get rewarded if we perform,” said Solomon, who this month marks three years as Goldman’s chief executive.
Under Solomon, the bank’s stock is up about 80 per cent and recently hit an all-time high, benefiting from an unprecedented boom in dealmaking and stock market volatility during the coronavirus pandemic. However, it still trades at about 1.5 times the bank’s book value, lagging behind peers JPMorgan Chase and Morgan Stanley, which trade at closer to two times.
Thanks for reading FirstFT Americas. Here is the rest of today’s news — Gordon
Five more stories in the news
1. Bitcoin exchange traded fund debuts on Wall Street The first US bitcoin exchange traded fund rose on its first day of trading with hefty volume, capping an almost decade-long push for a cryptocurrency-linked product to appear on a major Wall Street venue.
Read more: Robert Armstrong argues against this example of financial innovation in the latest edition of his Unhedged newsletter. Read the full note here and sign-up to receive his daily market summaries here.
2. ‘Squid Game’ boosts Netflix’s subscriber growth The breakout success of the South Korean drama Squid Game helped Netflix to double its new subscribers from a year earlier, the company revealed in its latest results. The streaming service said the hit series, released in September, reached more than 142m viewers globally.
3. China presses McDonald’s to expand e-currency system before Olympics China has told McDonald’s to expand a digital renminbi payments system at restaurants across the country before the Beijing Winter Olympics, as the country prepares to launch the world’s first major e-currency.
4. WeWork’s belated arrival on stock market The office-space company will finally make its debut after a $9bn merger was approved by shareholders of a blank-cheque company, BowX Acquisition, bringing to an end WeWork’s tumultuous two-year journey to go public.
5. House told to hold Bannon in criminal contempt Members of a congressional committee investigating the January 6 attack on the US Capitol have recommended that the House of Representatives hold Donald Trump’s former strategist Steve Bannon in criminal contempt for his refusal to comply with a congressional subpoena.
Coronavirus digest
Prices of new homes across China’s biggest cities fell in September, the first month-on-month decline since April 2015.
An executive at Regeneron, a company that makes a Covid-19 antibody treatment, has made the unsubstantiated claim that Colin Powell’s life could have been saved if he had received infusions of the drug.
The US drug regulator will announce its support for individuals receiving a different Covid vaccine for their booster shot than their original jab.
Global supply chain problems could drag on for “several months” as shipping companies struggle to bridge a “supply-demand mismatch”, the head of the World Trade Organization has told the FT.
Opinion: Stable funding for less glamorous diseases would make the vaccine system fairer and more resilient, writes Brooke Masters. (FT, CNN)
The day ahead
Federal Reserve’s Beige Book report The US central bank will release its update on the state of the economy, which may cement expectations over the timing of the first interest rate rise since the start of the pandemic.
Earnings Electric pioneer Tesla will be among the companies reporting earnings today. We’ll also be watching results from IBM, CSX, Nasdaq, Verizon Communications and Las Vegas Sands. See a full list here.
Who do you think are the most influential women of 2021? Ahead of our annual Women of the Year series, we are collecting your recommendations. Share your suggestions in the comments below this story.
What else we’re reading
Virginia’s gubernatorial race tests the president With Joe Biden’s approval ratings falling, election watchers say Virginia’s gubernatorial race is “too close to call”. Former private equity executive Glenn Youngkin has narrowed the polls by appealing to moderate Republicans. His campaign, however, is avoiding two words: Donald Trump.
The rule of law is disintegrating in Central America Daniel Ortega, the president of Nicaragua, was the first Latin American leader to crack down on opponents, says José Miguel Vivanco, Americas director at Human Rights Watch. The leaders of El Salvador, Guatemala and Honduras are now following. He calls on the US, EU and UK to do more to defend the rule of law in the region in this impassioned column.
COP26 is the real thing Despite the profound effect that human activity has on the climate, emissions continue to rise. Will COP26 change that? Doubtful, according to Martin Wolf. The energy revolution is feasible and affordable, he argues, but technically and politically difficult.
Leslie Hook, the FT’s environment correspondent, will be in Glasgow next month for COP26. If you have any questions that you would like Leslie to answer, please email firstft@ft.com and we will publish her responses.
Afghan women resist Taliban segregation Women’s lives are being severely circumscribed across Afghanistan as the Taliban reimposes the segregation that marked its rule in the 1990s, despite promises to protect rights. But many women, particularly the urban and educated, appear unwilling to accept the constraints.
America’s political and business elites split over China In Washington, vigilance to Beijing is the nearest thing there is to a bipartisan verity as lawmakers brood over Chinese gains in artificial intelligence and hypersonic missiles, writes Janan Ganesh. In Wall Street and beyond, though, commercial imperatives are reasserting themselves.
Which group do you think is taking the right approach to China, Washington or Wall Street? Tell us in our latest poll.
Motivating your team means letting go Post-pandemic, managers are having to make the transition from the old world of command and control to a new system based much more on trust, says Jo Owen, author of Smart Work: The Ultimate Handbook for Remote and Hybrid Teams. She offers four ways to help teams rediscover their intrinsic motivation.
Travel
From desert redoubts in Namibia to private lodges in Kenya’s Maasai Mara, here are five wild African escapes to book now.
Source: Economy - ft.com
