1929, Goldman Sachs Group is still a very conservative family business. Vidio Katchens, the company leader at that time, wanted to develop Goldman Sachs from a single bill business into a comprehensive investment bank. His first step was to introduce the stock business and set up the Goldman Sachs Stock Exchange Company. Driven by his enthusiasm, Goldman Sachs entered and rapidly expanded its business similar to today's mutual funds at the rate of setting up a trust and investment company every day, and its stock circulation increased by $6,543.8 billion in a short period of time. At one time, the company developed rapidly, and the stock rose from a few dollars per share to more than $ 100, and finally to more than $200. However, the good times did not last long. 1929 the global financial crisis and the wall street stock market crash caused the stock price to plummet to more than one dollar, which caused the company to lose 92% of its original investment. The company's reputation has also plummeted on Wall Street, becoming synonymous with laughingstock and mistakes, and the company is on the verge of bankruptcy. Since then, his successor, Sidney Weinberg, has maintained a conservative and steady business style, and it took 30 years to bring Goldman Sachs back to life after its fiasco in the "financial crisis". In 1960s, the increase of block stock trading brought new growth. The anti-hostile takeover business has made Goldman Sachs truly a world-class player in the investment banking field.
1970s, Goldman Sachs seized a big business opportunity, thus making a sudden appearance in the field of investment banking. At that time, "hostile takeover" appeared in the capital market, which made the investment industry completely break the traditional pattern and prompted the emergence of a new industry order. Goldman Sachs took the lead in playing the banner of "anti-takeover consultant", helping those companies suffering from hostile takeovers to invite friendly bidders to participate in the bidding, raising the purchase price or attacking hostile takeovers by means of antitrust litigation. Goldman Sachs suddenly became an angel of hostile acquirers.
1976 after the death of Levin, a senior partner of Goldman Sachs, the company management Committee decided that Weinberg and Whitehead should be the successors of Goldman Sachs. At first, people on Wall Street suspected that this two-person leadership structure would lead to chaos within the company. Soon they found themselves wrong, because the two newcomers cooperated tacitly, and Goldman Sachs entered the ranks of the world's top investment banks. Weinberg and Whitehead have long believed that enterprise management is chaotic, which is characterized by unclear definition of rights and responsibilities, lack of discipline and huge expenditure. For example, for many years, every afternoon at 4: 30, there will be a special car to pick up and drop off partners. The first thing the new leader did when he took office was to post a concise announcement: "The convention left over from history-driving at 4: 30-will not be continued and will take effect on the same day." From then on, the level privilege of partners will no longer exist and the fees will be monitored. Every afternoon at 4: 30 is no longer the end of the day, but the middle of the afternoon work. Although they started slowly, the success of Weinberg and whitehead in 1970s and early 1980s was largely attributed to the development of mergers and acquisitions. In the past, if a company intended to acquire another company, it would probably try its best to attract or persuade the other party to agree, and would never force a public merger. However, in the 1970 s, the investment banking industry, which has always been civilized and standardized, suddenly came to an end, and some large American companies and investment banks abandoned this industry tradition. From June 65438 to July 0974, Morgan Stanley, the most reputable investment bank, first participated in hostile takeover activities. At that time, Morgan Stanley, on behalf of its Canadian customer INCO, tried to acquire the largest battery manufacturer in the world at that time, the battery company (ESB). After learning of Morgan Stanley's hostile intentions, ESB called Friedman, who was then in charge of Goldman Sachs' M&A department, for help. At 9 o'clock the next morning, Friedman was sitting in the office of the boss of ESB company in Philadelphia. When he learned that the bid was $20 per share (up $9 from the previous trading day), he suggested that ESB adopt the method of "white knight" (the company that was maliciously acquired invited friendly bidders to participate in the bidding to increase the purchase price) to deal with INCO or antitrust litigation. With the assistance of Goldman Sachs and The White Knights United Aircraft Manufacturing Company, INCO finally paid a high price of 4 1 USD, which was in the hands of ESB shareholders. Judging from this incident, in the repeated takeover and anti-takeover struggles, first Morgan Stanley and then First Boston played the role of the acquirer, while Goldman Sachs was the pillar of anti-hostile takeover.
The struggle between INCO and ESB has given Goldman Sachs successful experience in this respect. This is also a good sign of good luck. People think that Goldman Sachs is a powerful and rising enterprise, fighting side by side with small and medium-sized companies and large companies that have entered the world's top 500. Because all of a sudden, the CEOs of American companies are so afraid of malicious mergers and acquisitions that it is difficult for all companies except some of the biggest companies to resist malicious mergers and acquisitions, so Goldman Sachs has become their partner. Of course, in the early days, Goldman Sachs often visited several times before the other party was willing to accept Goldman Sachs' services. 1In July, 976, Aztec Oil Company was attacked by hostile forces, but they were completely uninterested in Goldman Sachs' services. They hired a lawyer and initially controlled the situation. Friedman suggested to reconsider his decision and told the other party that the working group of Goldman Sachs was on its way to the airport and could have private consultation with them in a few hours. Friedman later said: "We rushed to the airport and flew directly to Dallas, but the other party still didn't want to see us, so we stayed near their company and went in to tell the other party something they hadn't considered thoroughly, but the answer was' We don't need your service'. We said,' We'll come back tomorrow'. In the future, we will go to the nearby shops to buy something every day to let them know that we insist on staying and waiting for news. " Finally, Azek Company realized the seriousness of the problem, felt the persistent spirit of Goldman Sachs and agreed to provide services for it. Participating in hostile mergers and acquisitions made Morgan Stanley gain record income, but Goldman Sachs adopted a completely different policy and refused to provide services to hostile acquirers. Instead, Goldman Sachs will protect the victims. Many competitors believe that Goldman Sachs' move is hypocritical, aiming at attracting attention and winning people's hearts, while Goldman Sachs believes that they are responsible for the long-term interests of themselves and their customers. The benefits brought by the anti-hostile takeover business to the investment banking department of Goldman Sachs are immeasurable. 1966, the business income of M&A department was 600,000 dollars, and by 1980, the income of M&A department had risen to about 90 million dollars. 1989, the annual income of M&A department was 350 million dollars. Only eight years later, this index rose to10 billion dollars again. Goldman Sachs has thus truly become a world-class "player" in the investment banking industry.
Goldman Sachs regards "taking the lead" and "taking the lead in imitation" as its important development strategy. 198 1 year, Goldman Sachs acquired J-Alang Company and entered a new field of foreign exchange trading, coffee trading and precious metal trading, marking the beginning of diversification of Goldman Sachs, surpassing the scope of traditional investment bank agents and consultants and having a fixed income. By 1989, Alang Company contributed 30% of Goldman Sachs' total profit of $750 million. In the 1990' s, the senior management of Goldman Sachs realized that the company would not prosper forever only through agents and consultants. So they set up capital investment business, set up GS capital cooperative investment fund, make long-term investment for 5 to 7 years by underwriting equity, bonds or company's own funds, and then sell them for profit. 1994, Goldman Sachs invested13.5 billion dollars in exchange for a 28% stake in Ralph Lauren, a clothing company, and appointed its own president. Three years later, 6% of the shares were sold for $487 million. The remaining shares rose to more than $5.3 billion. In just three years, Goldman Sachs' capital investment income has increased by nearly 10 times, while the investment banking department of its old business has only quadrupled. In 20 12, Fortune Global 500 ranked 290th.
Investment banking, like other industries, a business innovation and adventure can make a company famous and rich overnight. After tasting the sweetness of innovation, Goldman Sachs regards "taking a step" and "taking the lead in imitation" as important development strategies.