Goldman Sachs chief executive David Solomon has expressed optimism about the forthcoming initial public offering (IPO) of ARM Holdings (LON:ARM), a chip design firm backed by SoftBank (TYO:9984) Group Corp. Speaking at the Barclays Global Financial Services Conference on Tuesday, Solomon stated that the IPO, which could value ARM Holdings at up to $55 billion, signifies an improving environment for capital markets activity. Goldman Sachs is one of the lead underwriters of the IPO.
This week, Solomon highlighted that this significant IPO could initiate a "virtuous cycle" of bringing more backlog to Wall Street. He mentioned that there are several other substantial IPOs in the market, marking an improvement in the sector.
In terms of internal affairs, Solomon addressed the recent press coverage regarding dissent within Goldman Sachs. He emphasized that the firm is focusing on restructuring its consumer business, including the sale of its GreenSky lending unit. Solomon did not provide further details.
He also responded to criticisms from current and past insiders about company direction and partner turnover. Solomon dismissed these as nothing different from any other cycle, expressing surprise at the level of attention Goldman Sachs receives.
The CEO also voiced concerns similar to those of JPMorgan Chase & Co. (NYSE:JPM)'s chief executive Jamie Dimon regarding proposed stricter capital requirements for banks. He questioned whether increasing capital is the best solution to ensure a safer and sounder system.
Despite low marks for losses in consumer banking, Solomon argued that stagnant capital markets and M&A environment have presented larger challenges to Goldman's business. He described the current year as a "pretty lousy environment" for their operations.
On Wednesday morning, Goldman Sachs stock was up 0.6% in premarket trading. However, the stock has seen a 3.6% decline so far this year, compared to a 4.5% rise by the Dow Jones Industrial Average.
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