Goldman Sachs

"These weren’t wholly new ideas, of course, and industry analysts argued that incumbents would be able to sink X.com by simply building copycat products. But Musk had seen the big banks’ unwillingness to innovate from within—he wasn’t losing sleep over possible competition from the JP Morgans and Goldman Sachs of the world."

"With investors suitably wooed, Musk huddled with his bankers on a call to discuss what they’d price Tesla’s stock at. The bankers recommend starting at $15 a share. Said Musk: “No. Higher.” Goldberg hadn’t been doing IPOs for very long but in his three years at it, he’d never seen any CEO push back on price like that. After all, these bankers from Goldman Sachs and Morgan Stanley were the experts. Now the experts were stunned. They muted their phones, filling their side of the conversation with profanity as they debated their next steps. Who the fuck does he think he is? Who here can convince him otherwise? Is this whole thing going to fail? Is it too late to pull out? In the end, they had gone too far to back down. Musk had them over a barrel, and after watching him for months as he pushed back against custom, they knew it was well within his MO to walk away if he didn’t get what he wanted on arguably the most important part of the IPO—the decision that would impact how much money Tesla took away from the arrangement."

"Buffett, after a long period of relative inactivity stretching back to the immediate aftermath of 9/11, has had one of the most active periods of his long career. Since the fourth quarter of 2008, he has deployed over $80 billion (over $15 billion of it in the first twenty-five days after the Lehman collapse) in a wide variety of investing activities: • Purchased $8 billion of convertible preferred stock from Goldman Sachs and General Electric • Made a number of common stock purchases (including Constellation Energy): $9 billion • Provided mezzanine financing to Mars/Wrigley ($6.5 billion) and Dow Chemical ($3 billion) • Bought various distressed debt securities in the open market: $8.9 billion • In Berkshire’s largest deal ever by dollar value, bought the 77.5 percent of Burlington Northern that he didn’t already own for $26.5 billion • Acquired Lubrizol, a leading, publicly traded lubricant company for $8.7 billion • Announced a sizable ($10.9 billion) new investment in IBM stock Over the same period, John Malone has been quietly conducting an extended experiment in aggressive capital allocation across the disparate entities that were spun out of TCI’s original programming arm, Liberty Media. In the depths of the financial crisis, Malone: • Implemented a “leveraged equity growth” strategy at satellite programming giant DIRECTV—increasing debt and aggressively repurchasing stock (over 40 percent of shares outstanding in the last twenty-four months). • Initiated a series of moves across the former Liberty entities, including the spin-off of cable programmer Starz/Encore and a debt-for-equity swap between Liberty Capital (owner of Malone’s polyglot collection of public and private assets) and Liberty Interactive (home of the QVC shopping network and other online entities)."

"These weren’t wholly new ideas, of course, and industry analysts argued that incumbents would be able to sink X.com by simply building copycat products. But Musk had seen the big banks’ unwillingness to innovate from within—he wasn’t losing sleep over possible competition from the JP Morgans and Goldman Sachs of the world."

"In fact, while the world was looking elsewhere, Koch Industries built a financial trading desk that rivaled anything operated by Goldman Sachs or Lehman Brothers. Koch Industries, known for crude oil and natural gas, became a world leader in making and trading some of the most complex financial instruments in the world. Koch’s trading business was a strategic"

"Koch Industries, an industrial conglomerate based in Kansas, seemed particularly unsuited to thrive in this environment. The company seemed confined to the business of making things and processing raw materials in complex, expensive facilities. A Koch engineer in Texas didn’t seem to have anything in common with a banker in New York. In fact, while the world was looking elsewhere, Koch Industries built a financial trading desk that rivaled anything operated by Goldman Sachs or Lehman Brothers. Koch Industries, known for crude oil and natural gas, became a world leader in making and trading some of the most complex financial instruments in the world. Koch’s trading business was a strategic centerpiece of the company’s growth strategy over the next decade. It was also the most striking example of Koch’s ability to amass and exploit information asymmetries, learning more than everyone else and turning huge profits from this advantage."

"Koch Industries, an industrial conglomerate based in Kansas, seemed particularly unsuited to thrive in this environment. The company seemed confined to the business of making things and processing raw materials in complex, expensive facilities. A Koch engineer in Texas didn’t seem to have anything in common with a banker in New York. In fact, while the world was looking elsewhere, Koch Industries built a financial trading desk that rivaled anything operated by Goldman Sachs or Lehman Brothers. Koch Industries, known for crude oil and natural gas, became a world leader in making and trading some of the most complex financial instruments in the world. Koch’s trading business was a strategic centerpiece of the company’s growth strategy over the next decade. It was also the most striking example of Koch’s ability to amass and exploit information asymmetries, learning more than everyone else and turning huge profits from this advantage."

"The first large bet was made in conjunction with TCI, a London-based asset manager led by Chris Hohn and known for a number of activist incursions, namely ABN Amro Bank and the Deutsche Borse. 3G and TCI both acquired a large stake in CSX, an American railroad company, and pressed for aggressive changes in the company’s management. They were partially backed by Behring’s experience in ALL, Brazil’s largest railroad operator. After CSX, 3G raised a new fund enabling it to announce the take-private of Burger King in 2010. The fast-food chain was then held by private equity funds run by the Texas Pacific Group, Bain Capital, and Goldman Sachs, who’d purchased the company from Diageo in 2002. The group was having trouble running it, especially after the 2008 recession. The buyout valued BK at $3.3 billion (plus $700 million in debts), or nine times earnings. The disbursement was levered roughly one-to-one, which added around $1.7 billion of takeover debt on top of the existing $700 million. Bernardo Hees,"

". The relationship with Perkins became an important one for Heatley. Perkins was known and respected in Auckland business circles. Importantly, Heatley felt that even though he himself was young, Perkins took him seriously and had faith in him. Heatley thought of Perkins as a mentor. It was through Perkins, Heatley thinks, that Tapper and George’s faith in him also grew. ‘A lot of people in business can be trustworthy but I wouldn’t trust them with my life,’ Heatley observes. ‘But Bruce Perkins, Margaret George and Margaret Tapper? They are salt-of-the-earth people and I would trust them with my life. Absolutely.’ Perkins’ son, Clark, who was at Goldman Sachs until starting private equity company Mercury Capital in 2010, became Heatley’s close friend."

"While Heatley is ready to credit good luck as a significant factor in his success, he does not have the Midas touch. His biggest corporate success, Sky, became a household name but other investments have failed, some at considerable cost. In about 1999, Goldman Sachs suggested an investment that he says was touted to him as a great opportunity for a few affluent investors. Walker Wireless was a new company started by Rod Inglis that was aiming to provide a new broadband/wireless network in New Zealand. Heatley had always believed in the internet and in mobile technology, although he says his first instinct on Walker Wireless was ‘nah, no’. However, partially swayed by the other investors who were involved, he made an initial investment of $2–3 million. His mistake, he says, was that once he was close to the business and felt that it did not know what it was doing, he invested more. Start-ups, as he personally knew, often needed more capital than the founders had initially thought. But over about five years as the company lurched from crisis to crisis, always losing money, he invested $10 million, and lost it all. He considers it an expensive lesson in knowing when to cut your losses, although that point is often learned only with the benefit of hindsight overlaid with regret."

"Lazard—like Lehman Brothers, Kuhn Loeb, Dillion Read, and Goldman Sachs—was viewed as a Jewish firm."

"in the 1970s, this unwritten “social contract” was ripped up by Morgan Stanley. This quintessential “establishment” investment house made a hostile bid on behalf of International Nickel, one of its longtime clients, for a battery maker. In the aftermath, all the old-line houses—with the exception of Goldman Sachs—followed. The rules had changed. And they had for us, too, at Lazard, at least somewhat. But I personally did not care for hostile takeovers, and would participate in such an activity solely on the behalf of a large, well-financed, longtime client of the firm and only after exploring all other possible alternatives. In a financial lifetime that included several hundred transactions, less than half a dozen of my deals involved my representing hostile bidders."

"The meeting went on until 1:35 A.M., and Tisch, whose reputation for integrity and Wall Street savvy had brought him to Getty’s atten- tion, began to wonder about Getty’s focus. Getty had met Tisch just a few weeks earlier and had already begun to rely on his commonsense approach to the situation, but it quickly became clear that Tisch wasn’t there to further Getty’s agenda. As always, Tisch was there to do the right thing for all the shareholders. The board reconvened at 1:45 a.m. Tisch told Getty he should de- mand that Pennzoil increase its bid to $120 a share. Pennzoil had to offer enough money to eliminate any lingering doubts about whether the price was a fair one. If the board approved a low bid, directors could face litigation by angry shareholders. On the other hand, Tisch saw no point to Sid Petersen’s proposal that the Getty company should buy back its own shares. If we’re voting for a self-tender just because we’re upset at Pennzoil and Mr. Getty, that’s not a valid reason,” Tisch told the board. Ad- dressing Getty, he said, “You may have suits if you do this by threat, and you should discuss this with your attorneys.” The threat was that, once the standstill was over, Getty and Williams would vote out op- posing directors, but the board couldn’t take the legal risk of accept- ing a deal that Goldman Sachs hadn’t deemed fair. “If someone challenges this transaction,” Tisch told him, “we will say you forced us, Mr. Getty.” “I have done nothing unethical!” Getty said. This is not ethics. You have not given the board the opportunity to seek a fair price, Tisch said. “A small ten-dollar sweetener. Some- thing to satisfy this board.”"