Goldman Sachs stands to lose $260 million from 4 flailing stock investments

Richard Drew/AP

• Goldman Sachs could lose as much as $260 million as some of the bank's largest stock investments take a turn for the worse this year.
• According to Bloomberg, the potential losses are mostly driven by stakes in Avantor and Uber, which both completed billion-dollar initial public offerings in 2019.
• The bank's equity investments helped boost its profits in the second quarter, adding about $500 million in earnings mostly fueled by a one-time gain from its investment in Tradeweb Markets.
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Goldman Sachs stands to lose as much as $260 million as some of the bank's largest stock investments stumble.

The bank's potential losses are mostly coming from investments in Uber and Avantor, according to Bloomberg, which scoured corporation filings. Both companies raised more $1 billion through initial public offerings in 2019.

Uber's stock price fell more than 30% during the third quarter, while Avantor lost close to 15%. Goldman could lose more than $100 million from its stake in each company, Bloomberg's study found.

Goldman's equity stakes are investments made with the bank's own money. The gains from those holdings have been one of the largest sources of profit for the bank in the past, and its leaders have argued they represent a skill shareholders should value, according to Bloomberg.

The firm's investments in companies such as Uber, Avantor, Tradeweb Markets, and Headhunter Group helped boost the bank's profits in the second quarter. The positions added about $500 million in earnings primarily fueled by a one-time gain from Tradeweb.

Goldman CFO Stephen Scherr said on an earnings call in July that the four equity stakes accounted for 55% of Goldman's $2.6 billion public investment portfolio.

The bank invested $5 million in Uber just a two years after it launched in 2009. Goldman also earned more than $400 million from Avantor's IPO this year, according to Bloomberg.

Shares of Goldman are up more than 17% year-to-date.

Read more: A hedge fund manager who oversees $2 billion lays out the road to profitability for Uber and Lyft - and explains why they have a unique bull case compared to WeWork

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