The 2021 Creatures of Goldman Sachs: its IPOs, SPACs, Direct Listings Are Imploding after Bonuses Spiked to a Record

They sure made hay while the sun was shining.

By Wolf Richter for WOLF STREET.

One of Goldman Sachs’ many splendid 2021 creatures, the American Depositary Receipt of Chinese ride-hailing company DiDi Global plunged 18% today, to $2.01. The ADR is now down 89% from its peak right after its IPO at the end of June last year, of which Goldman Sachs was the lead underwriter (data via YCharts):

The company announced two things today, nine months after its IPO:

  1. It plans to delist its shares from the NYSE before it finds a new stock exchange to list its shares, and won’t even apply for a new listing until after it finished delisting its shares on the NYSE.
  2. Its net loss in Q4 nearly doubled to 383 million yuan, as revenues plunged 13% to 40.8 billion yuan.

Didi’s effort to get listed in Hong Kong was scuttled in March, after the Cyberspace Administration of China informed DiDi that its proposals to prevent security and data leaks had fallen short, according to Bloomberg at the time.

The issue that DiDi’s American Depositary Shares might get delisted cropped up shortly after the IPO. Turned out, the IPO angered Chinese authorities and cleaned out US investors, and so this isn’t news to stock jockeys trying to buy the dip along the way, only to also get cleaned out. But today’s delisting details, plunging revenues, and doubling losses nevertheless rattled nerves further.

Meanwhile, the good folks at Goldman Sachs are happy: The firm extracted fees from the IPO, and it may have profited from the overallotment options during the initial pop, and as we now know, it paid its good folks record bonuses for 2021.

Goldman Sachs wasn’t the only underwriter of the DiDi IPO – there were a whole slew of them – but it was the lead underwriter, the “lead left bookrunner,” that has the lion’s share of responsibility and gets the lion’s shares of the fees. In DiDi’s IPO, the second and third joint bookrunners were Morgan Stanley and J.P. Morgan Securities. The other underwriters included a slew of firms around the world, in Hong Kong, China, Japan, New Zealand, etc. Everyone was trying to make a killing on it.

In addition to the fees, underwriters also get the option to buy the stock at the IPO price and sell it during the pop after the IPO, thereby being one of the big sellers that helped knock down those shares after the pop.

The benefits extracted by the underwriters from IPOs can be very large, especially if there is a big “pop” early on.

Here are a few of the creatures that went public in 2021 where Goldman Sachs was the lead left bookrunner and that have now imploded and that are included in my Imploded Stocks. Shown are the current share price and the decline from peak:

  • Vroom [VRM]: $1.90; -97%
  • Robinhood [HOOD]: $10.99; -87%, which Goldman now cut to “sell,” LOL
  • Stich Fix [SFIX]: $9.55; -86%
  • Bumble dating app [BMBL]: $25.63; -70%
  • Olaplex hair care [OLPX]: $14.96; -50%
  • Figs hospital scrubs etc. [FIGS): $18.37; -63%
  • Compass real estate tech [COMP]: $5.98; -73%
  • Clear Secure [YOU]: $28.33; -57%

Coinbase, a crypto exchange, didn’t go public via an IPO but via a direct listing in April 2021, so there were no “underwriters.” Shares just started trading rather than being sold at the IPO price before they start trading. But Goldman Sachs acted as the lead financial advisor, followed by J.P. Morgan, Allen & Co., and Citigroup.

It was the largest direct listing ever. It was called a “landmark moment” for crypto at the time. The hype was gigantic. The shares [COIN] started trading at $381, shot to $429, which was also the high point, and ended the day at $328, valuing it at $85.7 billion. Shares have now plunged by 66% from the first-day high to $145.16.

Squarespace [SQSP], which is into website hosting that included the predecessor site of WOLF STREET, was another direct listing where Goldman Sachs was the lead financial advisor. It started trading in May 2021. Shares hit the high in June, and have since plunged by 65% to $22.58.

But they’re all the same on Wall Street.

2021 was a huge record year, with 396 IPOs and 613 SPACs, raising a combined $316 billion from eagerly credulous hype-addicted investors, and generating billions of dollars in fees and profits from selling during the initial “pop” of the shares.

I’m not picking on Goldman Sachs alone. Goldman Sachs just happens to have been the #1 most prolific underwriter of classic IPOs (not SPACs) in 2021, with 147 IPOs in the US, valued at $16.2 billion, according to Dealogic. This includes IPOs where Goldman Sachs was not the lead underwriter.

JPMorgan Chase was #2 with 146 classic IPOs, valued at $15.2 billion. Morgan Stanley was #3 with 134 IPOs, valued at $14.3 billion. Next were Bank of America, Citigroup, and others.

SPACs collapsed even more spectacularly than IPOs. But Goldman Sachs was only #2 with 62 SPAC listings, behind #1 Citibank with 108 SPACs, according to Dealogic. Cantor Fitzgerald was #3 with 60 SPAC listings. Next were Credit Suisse, Morgan Stanley, and others.

Doing “god’s work”: As IPOs and SPACs imploded, bonuses spiked to records.

Goldman Sachs, when it announced Q4 earnings three months ago, disclosed that it set aside $17.7 billion for employee compensation expenses in 2021, up by 33% from 2020, for an average of $404,000 per employee. Still doing “god’s work,” as then-CEO Lloyd Blankfein said so eloquently in 2009.

For top-performing investment bankers at Goldman Sachs – including those responsible for imploded IPOs and SPACs and similar “god’s work” – the annual bonus pool increased by 40% to 50%, according to sources cited by Reuters.

Overall Wall Street compensation for 2021 hit a record of $257,500 per employee, up by 20% from a year ago, due to record profits, according to a report by the New York State Comptroller Thomas P. DiNapoli.

But Goldman Sachs was in the news last week with an unpleasant turn of events: its Q1 earnings report, where it disclosed that in Q1 this year, investment banking revenue – including the fees from IPOs and SPACs – plunged by 36% to $2.4 billion. And that asset management revenue collapsed by 88%, “primarily reflecting net losses in Equity investments and significantly lower net revenues in Lending and debt investments,” it said. Other Wall Street banks had similar confessions, and their shares sank. So this jig is up for now. But they sure made hay while the sun was shining.

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  110 comments for “The 2021 Creatures of Goldman Sachs: its IPOs, SPACs, Direct Listings Are Imploding after Bonuses Spiked to a Record

  1. Old Ghost says:

    “Overall Wall Street compensation for 2021 hit a record….”

    Hmmm…… that must mean Wall Street had a productive year, producing for the USA whatever it is that they produce ?

    • Marcus Aurelius says:

      They produce:



      Financial Advice


      Promotional Material


      Business Meetings

      Analytical Reports

      And, all of this is created on imported computers, computer screens, imported printers, cell phones, imported office furniture, etc.

      Extremely productive business they operate. All these “expenses” are included in the American GDP as a positive use of funds.

      • unamused says:

        There was a time when GDP only toted up spending in the Real economy but not the Phony economy, aka the Financial Industrial Complex (FIC). Don’t recall when that was changed. Apparently the FIC needed cover for its parasitic activities and got their numbers included in GDP.

        Some less official statistics, ex inflation and the contribution of the FIC, suggest that the Real economy hasn’t actually grown in the last 20 years. Why would I not find that surprising?

        • intosh says:

          “Don’t recall when that was changed. ”

          Perhaps around the time “Economic” became a “science” and has its own Nobel prize.

          “In 1968, Sveriges Riksbank (Sweden’s central bank) funded the establishment of the Prize in Economic Sciences in Memory of Alfred Nobel, to also be administered by the Nobel Foundation.” (Wikipedia)

          (Alfred Nobel rolling in his grave.)

      • Jon says:

        I have least respect for these analysts economists and bankers spewing bs and nothing of value.

    • SomethingStinks says:

      Yes, we had an abundant supply of bullshit last year…

      • kielbasa says:

        Good, maybe it can make up for some of the Rooskie ammonia they keep saying we’re not going to get. Can you throw a tarp over it?

    • Lune says:

      Campaign contributions?

      Butt seriously though, I never understood how financial services profit can be considered a good thing. Finance exists to connect holders of capital with people that can put that capital to productive use. That’s it. Every dollar they keep for themselves as revenue (not just profit) is a dollar of inefficiency in their role as intermediaries of capital allocation.

      A country that requires spending 20% of its GDP to accomplish this basic task will ultimately lose out to a country that’s not efficient at it.

      • Lune says:

        –sorry, meant lose out to a country that’s not as inefficient at it.

      • unamused says:

        The FIC costs more than it’s worth. It is obvious, to me at least, that it is a very large net negative to the real economy, and insists on the right to plunder it and blow it up periodically besides. Or else.

        And yet, the finance industry takes precedence over the real economy every time and in every situation, when it should be reduced to its proper role as a utility. One wonders how long it will take for the parasite to destroy the host.

    • intosh says:

      Why would any American kid want to become an engineer, architect or doctor?

      • Dan Romig says:

        My favorite quote from Dr. Richard Kyle, who is an orthopedic surgeon that designed some of parts of my hip that he’s he replaced; but alas none of the parts of my knee that he’s also replaced, “I’m just a carpenter that went to med school.”

        Second favorite quote that I’ll never forget when he told me he has an air cooled 911 and a water cooled 911, “They’re both six-speed manuals. I like to drive using my hands.”

        A resounding thank you to my carpenter, engineer and doctor!

    • USCG83 says:

      It’s always good to be at the top of a Ponzi scheme.

  2. Harvey Mushman says:

    I work for a financially conservative company. Our stock hit it’s peak in November 2021. It’s now down 17% from that peak.

    • Seen it all before, Bob says:

      I also work for a financially conservative successful company. Our stock is also down 19% since December.

      However, it is still up 180% since December 2019.

      180% in 2 years is DotCom bubble crazy.

      We will survive and be profitable if Wall Street leaves us alone.

      In the meantime, the executives are getting their retirement. I expect new high-level management soon.

    • NBay says:

      A very good article. I would also like to add reading the link to the NYS Comptroller is another GOOD example of how “god’s (financial) work” is done (it’s short and easy, for the wealthy old farts and troll-types here….who just want to bitch and spin in the comments).

      Please note the 2009 (during GFC!!!!?????) Wall St bonus record has not been broken (although it has been steadily increasing and is very close) and also ESPECIALLY that the comparison with the 1981 wage/employee types in NY has changed……RADICALLY.

      Yet ANOTHER result of the “Reagan-puppet Revolution” in our “laws”.

      I’d also like to note the Reagan-puppet obviously didn’t “defeat Russia”, so what exactly did he do that was “good” and for whom?

      Pretty sure he pleased “god”, too, although god(s) and I aren’t on speaking terms, as I think he is a total FUCK UP, and he may feel the same.

      Anyway, it’s OBVIOUSLY time to remove the quote from the Lincoln Memorial…that’s my main take away.

      • NBay says:

        It’s also my opinion that his ENTIRE goddamn FN 707 is in his Presidential Library JUST to take up SPACE, because he didn’t produce many original thoughts or actions for posterity to display.

        How many times can YOU watch, “Mr. Gorbachov tear down this wall!”

        It was the best scene in a shit movie, I guess, (and we almost had Reagan goes to Washington 2)

        But, big building = big hero, right?

        • Wisdom Seeker says:

          While it’s clear that Nixon in 1971 (end of the gold standard era) and Reagan in 1982 (start of the credit bubbles era) were watershed disasters… it’s not so clear that the politically palatable alternatives available at the time would have been better. Hindsight is crystal-clear but foresight has “supply chain issues”…

        • Harvey Mushman says:

          I may not be a good judge of presidential libraries, I’ve only been to the Ronald Reagan Library, but I think it is really good. In fact, I would say the the Air Force 1 707 and the Marine 1 Helicopter are my favorites at the library. You can sit and have Guinness and enjoy the awesomeness. They used to have an F-14 Tomcat parked outside, I don’t know if it’s still there. I’m not a political guy… just an aviation fan.

        • NBay says:

          Was just looking for one of my old Hilton Head t-shirt’s from the Pro Shop there, to remind myself there are people out there with NO “supply chain issues”…..must have lost them in one of my many moves…..a lot didn’t fit anymore and I only wore them there, anyway….no loss.
          Big lobbyist hangout, in case you didn’t know.

      • Brent says:


        In case one must apologize for being staunch RR fan – please accept my apologies. Society does not require us to be good.But it requires us to be polite 😀

        RR speech “A Time for Choosing” (1964) aka “The Speech” still inspires me.None of the problems enumerated therein were solved – neither by RR nor by his successors.But at least Ronnie Reagan saw things as they are and did what he could with what he had.

        I hope you know enough American History to understand “Billy Sol Estes never left shore” and other such recondite allusions.

        • Nacho Bigly Libre says:

          Amen. That speech gives me goosebumps. That strength of conviction; never to be seen again in the high office.

          His interview with Brokaw after 8 years in office was equally impressive.

          On topic, Goldman can make money when things are bull, things are bear or things are crab.

          Invest in shovel seller, not prospector.

        • perpetual perp says:

          Wisdom Seeker. It is my understanding that Vietnam War spending was draining our gold reserves. And thus the Nixon repudiation of gold sales in 1971. We went from world’s creditor to world’s debtor. And thus the new Empire was created.

        • NBay says:

          OK Reagan fans,

          So FINALLY being given the right script, maybe Reagan wasn’t a just “B” actor, at least judging by some of the movie critics here.

          I’d post charts of all the things that went to hell socially and financially during his show here, as I have done many times, including Wolf’s income and wealth distribution charts, but those (like my relatives) who believe some people are born lazy while some are given the “calling”, won’t change.

          Calvinism runs very deep in the American psyche.

          And sorry if I don’t understand many of your “recondite allusions”, and doubt if I want to.

        • NBay says:

          That’s it in a nut shell, and I was around the FN policy makers and the FN policy, and am getting really upset and fucking pissed off again and better stick with the articles and avoid the comment section. I don’t feel polite at all.

        • cb says:

          @ Brent –

          so, why are you a fan of the amnesty grantor and deficit spender?

        • Nacho Bigly Libre says:

          Whatever molehills you want to call mountains, I’d take Reagan and Friedman over the miserable bunch of Carters, Bidens and the Keynesians any day.

  3. Brent says:

    I dont believe that jig is up.It looks like one scene from the movie “Fatal Attraction” when apparently dead chick rests at the bottom of the bathtub then suddenly comes back to life and starts strangling Michael Douglas.


    Watch for that intermittent gleam in Jerome Powell’s dead eyes.Soon skyrocketing, soaring and surging of stocks & RE will resume.

    Return to something resembling financial and budgetary sanity ? Highly unlikely. Quoting Dick Cheney “Not in our lifetimes !”

    • Depth Charge says:

      The DOW is going parabolic today. The FED has been talking a lot of shit, but doing next to nothing. They’re still throwing gasoline on a raging inferno.

      • Brent says:

        All of them going parabolic in tandem -DJIA, S&P, NASDAQ, Wilshire etc.

        Invisible Hand, I’ll say…

        Never sell America short !!!

    • cb says:

      Dick “deficits don’t matter” Cheney ……………
      another winner

  4. phleep says:

    Punters were in a mood to take a flier. There were credible possible future states of the world where at least some of these would come up aces. The little guy decided to spread bets sort of like a downstream venture capitalist. Something might hit big.

    Somebody would have picked up the business and the loose change being thrown at the dartboard. I don’t see any problem. GS is pretty infamous for its diligence in dotting i’s and crossing t’s, meaning folks were told what they might expect. And by now, after Abacus and other famous setups, people should make no mistake about what the GS ethos was about.

    I like to make money, don’t you? If I see a horde of people throwing money out a window, I’m as happy as the next guy to stand under it and catch a little. I mostly stayed out of the rush though.

    • Tom says:

      Maybe pay attention to Wolfs last letter on margin debt… and check out the transportation index… could we be getting close?

  5. phleep says:

    Nobody would have refunded their gains, if their speculation had worked. On the flip side, they can’t expect a bailout, or my sympathy.

    Lemmings gotta leap.

    • Harrold says:

      Yep, just look at the crowds in casinos. People looking for fast bucks are easy marks. Just tell em a good story and rake up the cash gushing in. Wall Street is very good at exploiting that.

      Matching people with an addiction problem with their drug of choice. You can’t sue because the gov’t mandated prospectus was your warning label.

      • phleep says:

        > Matching people with an addiction problem with their drug of choice. You can’t sue because the gov’t mandated prospectus was your warning label.

        I did what a free person does in a free country: I dealt with my “addictions.” And yes, there sure was a warning label, and that absolutely does have meaning. The ability to take on risks in a fair playing board (as when warned) is the crux of freedom and personal autonomy. Freedom isn’t free: it takes effort, diligence, and blame is so much easier.

        Ignoring all that is a super-modern conceit. It is dodging personal responsibility and ultimately undermining a system based on person autonomy and free contracts. Heaven help us if we (as the sentiment is a lot in comments here) abandon hat. Down that road lies serfdom, and the horrors of its type of leaders supposedly “setting things right.”

        The future is uncertain. An entrepreneurial culture is a response to that. It has winners and losers. Nobody was forced into this “casino.” Folks wanted something for nothing.

        • Sean Shasta says:


          On the contrary, people have been forced into the casino. Just a couple of examples:

          * ZIRP making savers chase some reasonable returns

          * First-time homebuyers being compelled to find a reasonable dwelling amidst crazy bidding by iBuyers (and hedge funds like Blackrock) and blowing up the housing bubble

          Tell me when basic essentials are available at reasonable levels, I will then accept your hypothesis. Till then, IMO, you are living in a fool’s paradise.

        • COWG says:

          “ Nobody was forced into this “casino.” Folks wanted something for nothing.”

          Slight quibble, phleep…

          Many were forced into the casino via 401k, Reagan’s Federal Employees Retirement System(FERS) and especially the late 70s Carter Admin, I think, which allowed corporations to fund their retirement systems as an obligated expense vice a separate funded system…

          That retirement funding ( now co-mingled ) then became a juicy target for hedge fund buyouts…or…

          Bankruptcy then wiped out the retirements for many people who were then dumped on the PBGC…

          See Delta Airlines…

          Wasn’t it also Enron, who required their employees 401k to also be invested in company stock…

          I see your point about people not being forced into the casino, however, many had no choice…

          I think I have the gist correct but feel free to elaborate…

        • cb says:

          yes phleep –
          you’ve been fooled. but carry on providing cover for the financial industrial complex.

  6. Brent says:

    Cue #2

    Forget BTC, NFT, EV etc…
    Carbon Removal Facilities are the New New Greenest-of-the-Green Thing !!! Earning potential il limitless.

    Doubting Dorothies who think that prosaic trees are the best carbon removal facilities just spread FUD (fear, uncertainty, doubt)

    HFSP – Have Fun Staying Poor !

  7. cas127 says:

    An interesting question is why-the-f capital raising should be so concentrated (in both underwriter and issuer terms) in an era of internet disintermediation and diminished costs

    The NYC banks’ platinum plated reputations? “Certification” function.


    Asked another way, why have crowdfunding sites mostly been a big bag of meh? (Despite statutory changes in their favor – years ago.)

    There is no Goldman “magic” (except for Goldman).

    Goldman has accidentally toppled, nudged, and actively tossed plenty of its well heeled clients into the wood chipper/sacrificial volcano…and yet HNW clients still take their calls.


    At least with institutional buyside clients you can picture the glorious sleaze of kickbacks and payoffs to acquire AUM.

    But that dynamic doesn’t work with HNW clients directing their own money.

    Why hand your millions over to some Goldman Gnome rubbing his hands in anticipatory glee, when modern internet tools make direct investing (via crowdfunding, etc) easily achievable?

    Why not at least *dabble* in alternatives to the NYC banks?

    And yet that *really* does not look to have happened – after 1999, 2009, and now.


    • phleep says:

      There is a lot of diligence to do, and investment banks can estimate prices better than others in advance, including, sounding out (and tapping into) networks in advance such as big block-buyers. They have a golden rolodex.

      • cas127 says:

        A lot of those Golden Rolodex cards have been melted down and pawned since 1999.

        It isn’t just disinterested parties viewing GS carelessness/self-dealing as “Mark of the Vampire Squid” – the whole point is that GS has a better and better documented history of blowing its own clients up – and yet it and the other NYC banks still appear to have a stranglehold on big dollar capital raising (rather needlessly in the internet age).

        My question is how/why.

        Estimating prices isn’t hard when you get it wrong…and flatling IPO’s within months doesn’t constitute getting it right.

        Ditto due diligence…it isn’t “hard” if it ends up being wrong consistently.

        And it is pretty hard to picture what exactly due diligence is on a SPAC anyway (“yep, that’s a painted tulip, yesiree!”)

        • phleep says:

          > it isn’t “hard” if it ends up being wrong consistently.

          Entrepreneurialism is hard and even when utterly genuine fails (OK, “blows up,” whatever) more often than not. Show me specific facts of fraud rather than just fiery innuendo and that would be a starting point.

          There was a rush into this space by retail investors. GS was savvy to be well positioned for it.

        • Lune says:

          Companies doing an IPO don’t want buyers who buy at the IPO and then immediately sell. That would ruin the 6 months of fawning media attention over their “successful” IPO that is crucial to keep the share price up until employees and other insiders with contractual lockup periods can sell.

          You go with Goldman or someone else because they have a massive rolodex of institutional and HNW individuals who are willing to follow that unwritten rule. Selling to Joe blow retail investors means you have no control over when they dump their shares.

          And why do those Goldman clients agree to hold shares for 6 months or a year or whatever, even though they have no legal obligation to do so? Because if you don’t play ball, you won’t get access to their next IPO.

          This “access” to IPO shares is as much psychological as economic (if you wait 6 months for the lock up period to end, you can usually buy close to or below the IPO price as employees dump the shares they’ve been accumulating for years). It’s important to these rich guys to be able to boast to their country club friends that their broker got them into Facebook / Uber / whatever hot IPO everyone is talking about. It’s like getting tickets to that hot restaurant no one else can get into.

          Why can’t companies cultivate these relationships directly? Because it takes time and effort to do so, and they only need them once (for the IPO), so it’s less hassle to pay Goldman to access the network they’ve already spent years cultivating. And that network will stay with Goldman because every few months they have another IPO they can buy into and boast about to their friends.

        • cas127 says:


          We aren’t talking entrepreneurialism here – we are talking about the *valuation*/*certification* of entrepreneurial efforts (allegedly what NYC IBs get paid to do by their HNW clients).

          They really aren’t the same thing.

          When IPOs (and, god help us, SPACs) collapse in a matter of months, those valuation/certification efforts are demonstrated to *be* farcical (after simply *appearing* to be farcical for many a ZIRP year).

        • Toni Costas says:

          We’ve got the best Goldman government Wall Street can buy, look out for bailouts ahead.

        • cb says:

          phleep said: “I see your point about people not being forced into the casino, however, many had no choice…”

          do you deny the fraud exists?

    • Sean Shasta says:

      The only reasonable explanation seems to be:

      In almost all cases, the IBs and their HNW clients cashed in well before the stocks went bust. That’s why they can keep doing it after every blowup.

      As George Carlin put it: “It’s a club, folks. And you ain’t in it”.

  8. phleep says:

    I could be corrected, but I believe the direct listing for Coinbase means insiders could sell out pronto, into the first rush of enthusiasm, without the usual stand-still period.

    If so, it’s yet another “innovation” alongside SPACs to slither legally around the edges of the rules and empty the rubes’ pockets.

  9. Wisdom Seeker says:

    DiDi’s in deep DooDoo!

    SPAC’s are going SPLAT.

    (It just had to be said…)

    P.S. Matt Taibbi had a great line back in the 2008-era when he referred to Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”. It hasn’t changed.

  10. SpencerG says:

    I doubt seriously that “the good folks at Goldman Sachs are happy” since they have to worry about their reputation for the NEXT of their IPOs. The people/entities that get to be part of an IPO aren’t casual retail investors. They aren’t going to be amused by a laundry list of Goldman IPOs blowing up in under a year.

    • Wolf Richter says:

      Them worried about a hit to their reputation? Nah, they went through the same thing during the dotcom bust, only smaller, and their trashed reputation didn’t stop them from doing anything, LOL

      • Jesse Livermore says:

        Not a surprise that GS, even after being turned into a bank after the great recession, made no effort to appear legitimate and just went full throttle back into its duplicity.

    • cas127 says:

      Above, I marvel at the apparent invulnerability of Goldman’s reputation,
      (really meaning NYC IBs in toto).

      In some bizarre way, there seems to be a permanent, very well heeled “Fans of the Vampire Squid” club no matter how many times GS steers (swims?) them into oncoming traffic.

      More and more frequently, it is like some sort of financial S and M club for the HNW set.

      • Sean Shasta says:

        Nope, the HNW set is not stupid.

        I am repeating my comment here:

        The only reasonable explanation seems to be:

        In almost all cases, the IBs and their HNW clients cashed in well before the stocks went bust. That’s why they can keep doing it after every blowup.

        As George Carlin put it: “It’s a club, folks. And you ain’t in it”.

        • cas127 says:

          But then you still need an army of bag holders, to insanely overpay the IBs, HNW, and insiders who all want to exit before the highly likely crash comes.

          That’s a fair number of IPO first gen shareholders with itchy feet, an eye on the door, and knowledge they are part of a dubious cabal.

          But back to the indispensable army of patsies – the second generation of shareholders who are the doomed salvation of conspiring Generation 1? How then are *they* assembled (and re-assembled, and re-assembled, and re-assembled) after NYC IBs have by now shown themselves to be fully willing to shift any merchandise…no matter how shoddy.

          I do take your point – the IPO first gen holders may be a well-heeled, fairly disciplined cabal, dedicated to cultivating a profitable (albeit very temporary) illusion.

          But then all that does is shift the question to the second generation of shareholders (the Doom generation).

        • Tony (one of them) says:

          the army of bagholders is the pensions

      • Sean Shasta says:

        > But back to the indispensable army of patsies – the second
        > generation of shareholders who are the doomed salvation of
        > conspiring Generation 1? How then are *they* assembled (and
        > re-assembled, and re-assembled, and re-assembled) after NYC
        > IBs have by now shown themselves to be fully willing to shift any
        > merchandise…no matter how shoddy.

        Yes, this is a big time operation. And the huge financial press and broadcast media (WSJ, MarketWatch, CNBC, CNNMoney, and others) with vocal pundits like Cramer et al seem to be well equipped for the task.

    • intosh says:

      The “they” you are referring to made money in these IPOs. The blowing up didn’t affect them.

  11. Cobalt Programmer says:

    Bumble is a dating app. How it can fail? Simple. Women make the first move. I registered and still waiting for some random women to make the first movie. Only the ossified brain could conceive such an idea. Still I believe, GS is making profits of all these IPOs.
    I still don’t understand. How come Rhood loose the money? Unless their purpose is to understand millennial and gen Z’s market moves which doesn’t make any sense either.
    Please share your thoughts on short squeeze.

    • Harvey Mushman says:

      “I registered and still waiting for some random women to make the first movie.”


      And when one of those random women does make the first move, she probably won’t be what you had in mind!!!

      My apologies to any woman reading this. You can just substitute the word “women” with “man”.

      • Betty says:

        Harvey, I appreciate, and accept, your apology.

      • COWG says:

        “ And when one of those random women does make the first move, she probably won’t be what you had in mind!!!”

        Well, it does take a while for Butch to become Beth….

    • Harry Houndstooth says:

      My Ukrainian farmgirl wife commented to me that the hens don’t chase the rooster. Robinhood allowed the naïve to take risks they did not fully understand.

      Wolf’s documentation of the beginning of the bear market with the implosion of overvalued worthless companies rhymes with history.

      In a bear market, there is no place to hide. Short squeezes are easy on the way up. On the way down, any rally is an opportunity to sell.

      • cas127 says:


        Hens just don’t let roosters *think* that hens are angling for them.

        That is why “drop something/let him “teach” you something” is dating advice for girls.

        I get the feeling that your farmgirl wife may have been playing chess, while you have been playing checkers :)

      • COWG says:

        “ Robinhood allowed the naïve to take risks they did not fully understand.”

        Robinhood allowed the intellectually lazy naive to take risks that they couldn’t be bothered with understanding fully…

    • phleep says:

      It might have worked. That is the essential idea. Maybe human culture would adjust. Every fool in the world walks around plastered to a “smart” phone, so sometimes something new breaks through. And being able to stake capital on that means having a great system.

  12. Matt says:

    Wolf, do you know how many of the companies that listed since the pandemic, by either route, are actually making a profit? It seems like most are loss making cash burning machines, which makes this entire fiasco even worse.

    • Wolf Richter says:

      From memory, and this was a while ago and may be outdated: Last number I can remember was that 70% of the newly listed companies were losing money. I don’t know whether this would be net losses under GAAP or “adjusted EBITDA” losses or similar homemade measures.

  13. Walter says:

    “The China Hustle” is a 2017 documentary which details the China side of scam listings, including a brief interview with a crooked U.S. general who made a fortune scamming people in the U.S.

    Coinbase has made a fortune but some slipperiness around their top leaders e.g. Armstrong. When Coinbase started they were the only exchange that hid their volume because their philosophy was “fake it til you make it”. From the very beginning they have avoided any significant investment at all in customer service.

  14. Jackson Y says:

    Why is Goldman allowed to underwrite all these low-quality IPOs without legal repercussions? They did the same thing in 1995-2000, leaving retail investors to suffer devastating losses. It’s time for the SEC to enforce some minimum standards for companies going public.

    • Wolf Richter says:

      If (God forbid) you ever read the “small print” — all the endless legalese — in the offering documents, you understand why: they outline how investors can lose all their money. CYA. They know how to do this.

    • phleep says:

      The future is uncertain. That’s what entrepreneurialism IS. GS was never an insurer/guarantor of the success of a risk venture. They never claimed or pretended to be. Why do so many folks here not get this essential, central concept? Only the Soviets and their ilk claimed a lock on the future — five year plans and so forth.

      • John H. says:


        I’m the first to stand up for free market entrepreneurialism. A strong incentive system tied to risk-taking, and creativity is essential to the technological and productive advancement of the race, and all that.

        But in the banking cycle there are at least 2 other elements at work: the revolving door, and government subsidy.

        REVOLVING DOORS: the interchange of employment between banking, government, and academia is on full display. “Civil servants” move on the high-paying Wall Street gigs or to a choice university post. University economists are appointed to corporate boards and government advisory councils. The recent BlackRock appointees are but the most recent examples as the governed become the governors.

        SUBSIDIES: Bailouts, arranged marriages, yield manipulation, rule changes, depositor insurance, IOR, and so many more. These encourage or allow behaviors that the free market does not, in an attempt to “guide the market” (at best), or to manipulate the market and pay off past loyalties (at worst). The expense to the taxpayer, and the avenues to corruption, are endless.

        It’s not a “five year plan,” and there are elements of free market in our financial services industry, but it’s the more insidious for pretending to be more classically liberal than it is, IMO.

        So I’m in favor of free market entrepreneurialism, but the government/banking/academia complex must be addressed.

    • Augustus Frost says:

      Look at the history of major regulatory legislation. It’s always closing the barn door after the horses have bolted and to prevent the scandal or crisis that already happened.

      As examples, the FDIC and SEC were created after the bank runs and stock market crash of the early 30’s.

      I believe starting in the 1970’s (1974 at the end of the 73-74 bear market), the SEC started designating Nationally Recognized Statistical Rating Organizations (like Moodys). The same firms assigning “AAA” ratings to garbage MBS before the GFC. It’s an inherent conflict of interest for the issuer to pay for the rating. I’ve read that before this change, bond buyers did so.

      More recently, there has been FDICIA (1991) after the S&L crisis, SOX after the scandals from the bust, and Dodd-Frank after the GFC.

      In banking, the three primary regulators (FDIC, FRB and OCC) have a small army supervising the systemically important banks, like JPM and WFC, all the time. It didn’t prevent the account opening scandal or any of the numerous other events in the media where these firms were fined.

      When this mania (the one we are in now) ends, there will again be recrimination from scandals coming “out of the woodwork” and more regulations will be passed to prevent the crash that already happened.

      I can already hear the rebuttal. Prison sentences would have solved this problem. Some of it maybe, but regardless of what regulation is put in place, it’s impossible to prevent manic psychology (the real root cause of the SPAC insanity) and use “macro prudential regulation” to compensate for systemic mostly government created moral hazard.

      Without manic psychology and government moral hazard, there would be no or at least almost no buyers for this garbage, across the board. That’s why it’s not a problem at the bottom of major bear markets or in the immediate aftermath.

      It’s been a problem this entire century because the mania has been in place the whole time.

      You’re writing about SPACs but look at “meme” stock trading. The SEC has warned about that, publicly, this is a bigger problem, and it’s still happening.

    • Zark Muckerberg says:

      SEC doesn’t has any teeth, they just want to be paid to look important. No way they going to bite the hand that kept the gravy train running via IPOs

  15. Jackson Y says:

    Based on market performance year-to-date, the New York Comptroller is forecasting a 20% decline in investment banking bonuses for this year (payable in 2023.)

    Adjusted for inflation, it’d still be the second fattest year for bonuses in Wall Street history.

  16. Trucker Guy says:

    As a know nothing who barely understands most articles here, I find it interesting that when I turn on the TV in the hotels I stay at all the most heavily advertised companies are the ones with shattered bones.

    I try not to watch tv but there’s nothing else to do but I remember when Zillow or realtor or opendoor or whatever shitastic company nearly went under I saw their tv ads every 20 seconds. Sometimes twice in one commercial break. A week later “algorithm AI house flipper _____ nearly drowns.” IIRC it was Zillow I think.

    I also agree with whoever said bumble is the dumbest idea ever. I wouldn’t put much faith in dating apps in general but a dating app where women have to be the conversation starter?



    • Bobber says:

      Did you notice the Etrade baby is out in commercials again? Apparently, investing with Etrade is a cure for inflation and poor savings rates.

      • Anthony A. says:

        Maybe they are getting the Robinhood spillover?

        Just the other day I was thinking about reactivating my closed Etrade brokerage account as I liked their online platform. But I doubt I will do it as I am happy with Schwab.

  17. SocalJimObjects says:

    As I’ve said before, buying high and selling low is the way to generational wealth!!!

  18. Martok says:

    Trucker Guy,

    Good post, and I remember back around 2008 how Countrywide, a unscrupulous mortgage national company pushed for zero down mortgages, using highly inflated values of properties, that were appraised by shady appraisers, and commercials everywhere, – them and many others went bankrupt big time.

    When I don’t understand a term or acronym here, I use to break it down to simple terms, and I would bet that just about all posters/readers have to lookup terms – it’s like medical terms, it all boils down to common understandable stuff.

    I had to laugh when you said about Bumble dating app, and women have to make the 1st “conversation starter” – Yeah right, maybe if they just got out of prison, and or hookers – LOL

    • Harvey Mushman says:


      Back before the housing crash I worked across the street from a Countrywide. The facility was busting at the seems. They rented parking spaces from another building because they ran out of space. They had catered lunches like every Friday. The smell of their food would come wafting over to my building. My company had a catered lunch maybe 2x in the 8.5 years I was there. Anyways, when the housing crash came the parking lot started to thin out then over time they left. That huge parking lot was empty. A few years later PennyMac moved in.

      • Augustus Frost says:

        In 2008 when BAC bought them, my boss was telling me what a “bargain” they got, supposedly for the mortgage servicing rights.

        Yes, buying mortgage servicing rights for mortgages heading into default is a great buy. So is the opportunity to “cross-sell” lending and wealth management products to a high proportion subprime customer base who is mostly broke.

        • John H. says:

          “ In 2008 when BAC bought them, my boss was telling me what a “bargain” they got, supposedly for the mortgage servicing rights.”

          Additionally, in the falling rate environment following this “bargain,” the average maturity anticipated for the mortgages dropped, too, assuming that some of the borrowers could refinance. So the buyer’s anticipated income stream ends earlier than expected.

          Some bargain.

      • Harry Houndstooth says:

        Great story. Thank you.

  19. cd says:

    credit criminals love tarp
    QE, Covid, so man others….nod to CR

    Goldman Sachs = Pigmen….

    • cd says:

      AI might be the only winner in recent IPO’s and is down 80%…..
      in the credit industry, machine readable data and AI are converging fast…

  20. Anthony says:

    In these dodgy, new, set up companies, were there any ” Military” based. I’m sure that, with the present world we live in, they would be booming, especially if they had the odd politician or three who they “helped” elect.

  21. Michael Engel says:

    1) The Fed RRP sucked $1.8T liquidity from the banks.
    2) Without JP liquidity we know are dead.
    3) Institutions and central banks will send NDX higher in order to dump AAPL, AMZN, MSFT…at higher prices, before we deflate, before the recession.
    4) Selling few $3T AAPL and $2T MSFT will provide plenty liquidity.
    5) If NDX close > 15,000 by the end of Apr good news might follow, after the battle of dma200.
    6) Can the DOW move higher in a low slog up : yes.
    7) Everything is possible, even a new all time high.

  22. Xaver says:

    We all know what to expect from Wall Street. SPACs were a clear indicator of market mania. I think that we have seen the top and the downside risks are very high.

    But it’s not only Wall Street. Any greedy, reckless investor is to blame.

    • Augustus Frost says:

      A SPAC is the equivalent of the most famous 1720 South Sea Bubble IPO, “An undertaking of great advantage, but no one to know what it is”.

      I don’t know if it is confirmed that event actually happened (purportedly raising 5,000 GBP) but we all know hundreds of SPACs have been floated.

      Yes, it’s one of many indicators this mania (from the late 90’s) is far worse than any other in history. It’s not even close.

  23. historicus says:

    These firms that continually draw off their capital to pay out bonuses seem eventually to be the ones with their hands out for Treasury rescue money in financial debacles, often of their own making.

    There should be a “holding period” in an escrow account for say 5 years for these bonuses….and if any blowups happen at the firm, these accounts are used first to cover the losses. Government bailouts should be conditional in this respect.
    The probability of this ever being instituted is near zero.

  24. phleep says:

    Interesting Buffett allied with GS in ’08 crash era, and had a large chunk of Moody’s going into that. Yet the grandfatherly patron saint of corporate capitalism has an AAA gold-plated reputation rating. If it makes money, folks will stay cool with it.

    • historicus says:

      Buffet lent money to GS as I recall….
      and of course Warren knew it was a bridge loan….assured that eventually the Treasury and Hank Paulson would make GS whole, and he would be repaid with a little extra.
      GS took $13 Billion if my memory serves me….and as they took it Lloyd said we really don’t need it…but thanks, we’ll take it.

    • Augustus Frost says:

      He’s the same person who has begged to be taxed more when nothing stops him from donating his entire fortune to the USG. I haven’t read that he paid a cent extra, so I assume he hasn’t.

  25. Winston says:

    “Bonuses Spiked to a Record – They sure made hay while the sun was shining.”

    AND while it isn’t. See the bonuses after the start of the GFC.

  26. perpetual perp says:

    We need tight regulation of all financial products and financially oriented corporations: i.e. banks, mutual funds, asset managers, equity partnerships etc. etc. And if they fail, no bail. If they are too big, then nationalize them when they fail.

  27. unamused says:

    ‘Doing “god’s work”’

    Divine right of bankers. I get it. Ius primae noctis too, I suppose.

    When only financial valuation is recognized as valid and normative valuation can be dismissed, the priceless becomes worthless. This explains why the planet’s resources and its human population are getting used up to create collections of ones and zeroes in bank computers.

    God wants everybody off the planet by the end of the month. He has a buyer who’s interested in the property.

    • historicus says:

      God’s work paid Solomon $35 million last year…(and he wants more!)
      God doesnt even make that much…..

  28. polecat says:

    Ah! .. the golden cajonesack boyz & girlzz

    Never a day goes by without some new shell to be gamed..
    They are as ticks to a dying dog! May they .. and by extention their follow parasites, be picked off and squashed.

    • unamused says:

      The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.

      – John Emerich Edward Dalberg-Acton, 1st Baron Acton

      • polecat says:

        ALL those senators and assembly club-members, who pontificate & legislate within that shining city upon a hill are primarily responsible for allowing GS et al .. via the SEC, Federal Reserve, K St. Add nauseum.. to do what they can to rig the game to whatever is in their favor.

        “A corrupt Republic, if you can Grift it!

  29. historicus says:

    “David Solomon is getting a bigger slice of Goldman Sachs Group Inc.’s private-equity profit. The Goldman Sachs chief executive and a tight circle of lieutenants are taking a cut of profits from the firm’s private
    investment funds, according to people familiar with the plans…
    Wall Street executives are enormously wealthy by almost any measure. Mr. Solomon made $35 million last year……..
    Ten percent will be shared with Goldman’s roughly 400 partners, …..Five percent will go into a pool for Mr. Solomon and his closest deputies, the people said, fewer than a dozen people.”
    WSJ 4/20/2022 FYI

    Must still be some money to be made at GS in their pocket of profitable financial antics.

  30. CreditGB says:

    In the 19th century, the travelling snake oil salesman who sold out his new batch of cures to the Sunday crowds in the town square, always disappeared by Monday.

    It is a failure of critical thinking and absence of analysis.

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