Pricing Goldman Allegations

On April 15th, Goldman Sachs common equity closed at $184. On April 16th, after the SEC announced that it was bringing a civil complaint against the firm, Goldman stock closed down 13% at $160. That means Goldman’s attracting the SEC complaint cost shareholders approximately $12 billion.

On April 29th, Goldman’s stock closed at $160. The following day, today, April 30th, following an announcement that the Department of Justice was investigating criminal allegations regarding Goldman’s conduct in the mortgage markets, the stock closed down 9% at $145. That means Goldman’s attracting a DOJ criminal investigation cost shareholders approximately $8 billion.

Total loss to date is $20 billion. Approximately $78.2 billion in shareholder value remains.

Shareholder’s biggest risk right now? A significant one is that civil and criminal investigations are announced with respect to Goldman’s role with AIG mortgage deals.

The great game of Goldman Whac-A-Mole continues with real money at stake.

Related reading:

Buffett Praises Blankfein, Backs Goldman Sachs on Abacus Trade
Bloomberg.com (3 May 10)