There is no denying the rebound in Wall Street deals. And for Goldman Sachs, it’s definitely bullish. Investors won two new reasons this week to be optimistic about the club’s stocks. Goldman was tapped as a financial advisor in large transactions to make the digital art private for video game publishers, while small investment bank Jeffries recorded its highest revenues in the third quarter, raised by the strength of the deal-making environment. Both of these developments boast revenue from Goldman’s key investment banking sector. This is the main reason why I started my position in December 2024. Goldman’s investment banking operations have recovered over the past few quarters, bringing fees from services such as underwriting initial public service (IPO) and advice on mergers and acquisitions (M&A). In 2022, macroeconomic uncertainty coming from the worst covid pandemic has nearly frozen IPOs and M&A activities. After Donald Trump won the 2024 presidential election, there was high hopes that his second term would lead to a more relaxed approach to business regulation. The stock market soared after the election, but undertook tariffs. Now, on the worst side of trade policy uncertainty, bets on a deal comeback are beginning to pay off. GS YTD Mountain Goldman Sachs (GS) Goldman Sachs’ performance share around the year reflects the investment bank’s bounce back. The strains that have since boiled slightly have still risen about 38% a year. This is even after a drop of around 1.5% on Tuesday with lower than expected consumer confidence data. The overall stock market was less than the possibility of government shutdowns. However, Tuesday’s deal won’t change the bullish paper on Goldman, which is further supported by the aforementioned two announcements starting with the EA leveraged buyout. The biggest LBO Goldman was revealed on Monday as a financial advisor to the electronic arts in an agreement that it would be acquired by private equity firm Silver Lake, Jared Kushner’s affinity partner and Saudi public investment funds. All-Cash transactions, which are scheduled to close in the first quarter of fiscal year 2027, are worth around $55 billion. The consortium has a total equity investment of approximately $35 billion and $20 billion in debt financing from JPMorgan. If completed, this will be down as the most utilized acquisition in US history. Leveraged acquisitions, often referred to as LBOs, are the way in which contracts acquire companies where the contract is funded by a mix of fairness and debt. Goldman receives a large fee to advise EA in take private transactions, a boon from investment bank revenue. According to Bloomberg, the deal will keep Goldman at the top of the list among M&A advisors. As Jim Kramer said at his monthly meeting in September, “The Goldmans got it all: IPOs, M&A, wealth management, sales, trading. And it’s the best with them. It’s the best.” Blowout Quarter Jeffries’ star quarter after Monday’s close-only exhibited corporate record advisory fees. Advisory revenues rose to $655.6 million, up 10.7% for the quarter. In short, investment banks’ net revenues rose 20.3% from the previous year to $1.14 billion. Despite the better-than-expected release, shares fell more than 3.5% on Tuesday. The stock was caught up in a sale of bank stocks on Tuesday, and also collided with club name Wells Fargo. Jefferies quarterly results give investors a positive read through of Goldman’s earnings report on October 14th. WellsFargo will report on the same day. However, Jim described Jeffrey’s Quarter as amazing during his “street squad” Tuesday morning. Now, I hope we can provide club holdings as well. We’ll also look at how Goldman’s second largest division, assets and wealth management, worked while the bank was trying to control the less crowded corner of Wall Street. (Jim Cramer’s charitable trust is the long GS, WFC. See here for a full list of stocks.) As a CNBC Investing Club subscriber with Jim Cramer, you will receive trade alerts before Jim makes a transaction. Jim waits 45 minutes after sending a trade alert before purchasing or selling stocks in the Charitable Trust portfolio. If Jim talks about stocks on CNBC TV, he will wait 72 hours after issuing a trade alert before running the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with the disclaimer. Due to receiving information provided in connection with the Investment Club, there is no obligation or obligation of the fiduciary. No specific outcomes or benefits are guaranteed.
