Goldman’s Rally on Trump May Give Partners $800 Million Windfall

  • Firm discloses how much stock top executives held on Nov. 9
  • Some partners misssed out on full profit after reducing stake

Goldman Sachs Group Inc. partners held enough stock in the firm Nov. 9 to reap a more-than $800 million gain in the days since, as investors bet Donald Trump’s surprise win would fuel Wall Street profits.

The paper windfall is based on figures in a regulatory filing late Wednesday showing how many shares the executives held the day after the vote, when Trump’s victory in the U.S. presidential race sent the stock soaring. Their holdings are predominantly long-term, as demonstrated by the bank’s periodic updates -- rather than a bet on the election’s outcome.

The filing underscores the huge profits in store for Wall Street executives if investors are right about the effects of Trump’s policies. His election sent shares of the biggest U.S. banks climbing on speculation he’ll dismantle regulation and boost long-term interest rates with inflationary spending, potentially burnishing profits for lenders.

Missing Out

Shares of Goldman Sachs have advanced 17 percent since Trump’s victory. Still, at least some Goldman Sachs partners missed out on the full gain after they cut their holdings in recent months.

Partners sold about 511,000 shares from Oct. 19 through Nov. 9, the filing shows, including about 112,000 shares on the day after the election -- just as the stock was starting to take off. Altogether, the stake they sold over those weeks would have generated an additional $15.5 million gain after the election.

Partner is the investment bank’s highest rank, a nod to its history as a private partnership before going public in 1999. The company typically names a new class of members every two years, and the pool then dwindles over time as some decide to leave or are pushed out.

The collective 6.69 percent stake held by Goldman Sachs’s partners on Nov. 9 was down from 7.24 percent near the end of January, the last time the firm provided a snapshot of their holdings. The drop coincided with a decline in the number of partners in that period.

Wednesday’s filing listed a total of 410 names, compared with 448 in January. News reports during the year have described more than two dozen of the exits. The firm named 84 people to the pool this month, the most since 2010.

Options Win

The stock’s jump this month also triggered sizable gains for Goldman Sachs executives holding worthless options that had been granted at the end of 2006.

A day before Americans voted, it looked like more than 1 million of the contracts held by top executives and directors would expire this week out of the money, meaning it wouldn’t make sense for executives to exercise them.

But after the stock jumped, they generated millions of dollars in additional profits. Within 10 days of the election, insiders at the bank sold more than $200 million of stock, company filings show. That’s three times more than the group sold in any month for at least five years.

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