As a matter of astonishment, Goldman Sachs Group Inc., which was blamed by the Government for deceiving investors, has been able to produce better profits for companies as well as buyers as compared to any other Wall Street firm.
According to the data accumulated by Bloomberg, a lot of American Companies using New York-based Goldman Sachs as the lead underwriter for initial sales, managed to get highest prices for their shares in the first half of the year 2010. These companies almost sold shares at an average 1.4% discount to their offering range.
Steven Kaplan, Professor of finance at the University of Chicago's Booth School of Business, said, "The issuer and investor care about the opposite things, and the investment bank is in the middle. There's conflict. Goldman appears to have done very well".
For Companies who want to raise capital and buyers and who seek huge profits, Goldman Sachs is still the bank of choice, according to finance professors at the University of Chicago and the University of Notre Dame.
Bloomberg data further revealed that about 6.4% was charged by bankers for underwriting U. S. IPOs this year.
The data also revealed that Goldman Sachs-led deals accounted for four out of this year's five biggest premiums. Companies failing to hire the firm to lead their IPOs managed to take average discount of 14% for their shares.
Tim Loughran, a Finance Professor at the University of Notre Dame's Mendoza College of Business in Notre Dame, Indiana, asserted that Goldman is undoubtedly the king investment banker.
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