Bad bet

Yet more bad news for the embattled Betfair - the recently floated betting exchange (about which I am obsessed) and on which I took a notional short back in November.

Respected trade website Gambling Compliance is now reporting that the company is "facing the revocation of its [already compromised] license in Italy following an investigation by the country’s gaming watchdogs" - which adds to the gambling group's problems as it attempts to convince investors that it wasn't joking when it trumpeted overseas growth during its IPO.

So far Betfair's investor relations department is losing that battle badly. The shares were off another 6% today to a new low of 975p (a 25% discount to the 1300p flotation price) making this a woeful float by any standards - even those of Betfair's main sponsor, Goldman Sachs.

Thoroughbred float quickly looks like an old nag

In an unusual moment of SlackBelly prescience, my notional short of Betfair - the recently floated betting exchange - is looking increasingly shrewd.

Its first set of interim numbers today - already showing sluggish growth - have caused the shares to slump (again), leaving them 22% below the 1300p IPO price and 26% off the level that even some duffer like me could tell was too rich.

I had attempted to short the shares on Betfair's own financial exchange, LMAX, only to be thwarted because the new website is yet to actually take bets on individual companies.

No wonder. LMAX is part-owned by Goldman Sachs, the investment bank which apart from stuffing investors with the Betfair float is also a hero of recent IPO campaigns such as Ocado (recovering to 8% below) and Promethean World (70% lower).

Still, you'd be a fool and a communist to suggest that they didn't deserve their fees.

Slack on the back

"Much talk about a potential sale of Virgin Active to private equity. But is it really likely? Potential bidders seem baffled by the stories and suggest that ubiquitous adviser Goldman Sachs - fresh from its Ocado triumph - is leaking the stories in a desperate effort to stuff another over-priced offer down investors' throats. Developing..." SlackBelly, July 28, 2010.

"Virgin Active, Sir Richard Branson’s gym chain, has shelved plans for a £1 billion flotation.

The company, which operates in Italy, Spain, Portugal, South Africa and the UK, had been exploring a float or sale to a private-equity firm. Insiders suggested the sale talks are also on ice although some observers believe a deal could yet be revived." Sunday Times, August 29, 2010.

Virgin (in)Active

Much talk about a potential sale of Virgin Active to private equity. But is it really likely?

Potential bidders seem baffled by the stories and suggest that ubiquitous adviser Goldman Sachs - fresh from its Ocado triumph - is leaking the stories in a desperate effort to stuff another over-priced offer down investors' throats. Developing...

Black not sheepish about breaking silence of the lambs

We've all kicked ourselves when unloading the weekly shop only to discover we've neglected to pop a couple of important items into the basket. But has Ocado just done the same?

The unprofitable soon-to-be-floated online retailer hired UBS, JP Morgan Cazenove, HSBC, Barclays, Lloyds Banking Group, Numis, Jefferies and Goldman Sachs to assist on the listing - a tactic almost certainly designed to stop any heckling about the firm's over-priced offer, as the flotation gig includes the implicit support the banks' biddable analysts.

Still, scribblers at institutions missing out on the Ocado gravy train don't seem as keen to partake in this silence of the lambs - and Shore Capital's Clive Black and Arden's Nick Bubb have even had the gall to say so. Time to pay off this insolent pair too?

Sindy Column...

Nobody is taking the word of God's bank as gospel any more. Who'd have thought it? For this week's column, click here.

Sindy column...

Is there a spat developing between Goldman Sachs's joint UK boss, "Fat" Mike Sherwood, and smoothy-chops PR man, Lucas van Praag? Click here.

The end is Nye

Might Gordon Brown honestly be starting to regret getting into bed with the Goldman Sachs crowd?

The investment bank got its big break in Whitehall via its former banker, Gavyn Davies – who is married to Brown's former private secretary and the current director of government relations, Sue Nye.

Since then, political expediency has forced the PM to start branding the bank as "morally bankrupt", while calling for an immediate investigation into the Goldman's dealings. But any votes he might have won through that bit of spin were more than extinguished by today's gaffe of calling Labour voter Gillian Duffy "bigoted".

And who does the "clunking fist" blame for exposing him to Duffy? Er, Sue Nye.

Tip for Tett

The FT's Gillian Tett today makes the now common mistake, when she says that clients are "risking the wrath of the giant Vampire Squid".
The actual phrase used by Matt Taibbi about Goldman Sachs was "great vampire squid". Surely if you steal other people's work, it's best to at least get it right...

How flotations work...

"The great vampire squid, Goldman Sachs, has been appointed to handle [Betfair's] £1.5bn listing." SlackBelly, October 19, 2009.

"Speculation about a flotation comes up regularly. But we are not about to appoint an adviser." Mark Davies, managing director of Betfair, tells the Evening Standard, November 30, 2009.

"Betfair has selected two investment banks, Goldman Sachs and Morgan Stanley, to advise it on a £1.5 billion stock-market flotation." Sunday Times January 24, 2010.

Pedants' corner...

Sometimes hacks are so certain they know something, they don't even bother to check it.
Today The Times and The Telegraph both tip their bowlers to Rolling Stone magazine, referring to Goldman Sachs as being a "giant vampire squid".
Just one problem. The actual words used in the famous piece by Matt Taibbi were: "great vampire squid".

It's a small matter, admittedly, but I happen to notice these things. Taibbi's full (entirely fair) line on the investment bank, actually went: "A great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
City journalists should find the time to read him. The boy can write.

FT brothers scoop their own scoop

Those nice chaps at the Financial Times can only be pushed so far.
Like BA staff, there is a day of action today and a picket (at the FT!). The National Union of Journalists are outside the building, in the snow, and meeting inside to discuss "Unsafe and Unprofessional workloads" says my spy.
The NUJ are also handing out flyers, the highlight of which is this: "Lloyd Blankfein, the Goldman Sachs boss and the FT's 'Person of the Year' is not the only doing God's work - so are FT journalists inproducing premium products for a discerning audience."
A slight problem is that the NUJ staffers have broken an embargo, because the great vampire squid himself has not actually been named Person of the Year by the FT, yet.
Whoops.

Team sheets omitted from Davies commentary

Mark Davies - managing director of betting exchange Betfair and son of footy commentator Barry - dismisses stories that the company has just appointed Rothschild to advise on a flotation.
“It's just not true,” Davies insists to the Evening Standard's City Spy column. “Speculation about a flotation comes up regularly. But we are not about to appoint an adviser.”
The freesheet seems sceptical about that response - and so it should be. What Davies fails to mention is that Goldman Sachs has already been asked by the betting group to handle the £1.5bn listing, while Credit Suisse has also been handed a spot in the starting XI.

Kafka on trial

Goldman Sachs's London spinmeister, Paul Kafka, is gamely persevering with his ambitious project designed to make his banking overlords appear more humane.
Vice chairman "Fat Mike" Sherwood - who likes to wear a personalised tracksuit while playing ping pong - used The Times's opinion pages last month to preach to ungrateful readers how Goldman's clients selflessly grow "the savings of millions of people".
Then chief exec Lloyd Blankfein joined the crusade, telling the Sunday Times how he and his disciples are merely performing "God's work".
And, today, the Holy Trinity was completed with chief economist, Jim O'Neill, popping in to give the economic sermon in the Evening Standard.
For some reason, Jim got slightly distracted and waffled on a touch about a trip to China with the missus, but was soon back on message to namecheck his ultimate master.
He argued the credit crisis was "an act of God" for China, before signing off with a quick "thank God for the English language".
After all that, any sane soul would now recognise it's time for Kafka to revert to type and impose a vow of silence. But, like much of his namesake Franz's work, City wags fear his shameless publicity project remains unfinished.

A parable of our time

It would be churlish to allow the news that Goldman Sachs is busying itself doing "God's work" without marking the announcement with a new SlackBelly series celebrating the bank's legions of disciples as they go about their good deeds.
To begin, here's a picture of Goldman Sachs International co-chief executive, "Fat Mike" Sherwood, putting in another shift for the Almighty at the ping pong table while wearing a tracksuit personalised with his own initials.
Fortuitously, this snap landed in my in-box just in time to be included in this feature - proving that there is a God who we can all work to please. He really does work in mysterious ways.

News of a GS banker? Please email the collection plate at postmaster@slackbelly.com.

Blankcheque threads his way through the eye of a needle

Goldman Sachs boss Lloyd Blankcheque says that he's doing "God's work" impersonating a great vampire squid. But which God?
Blankfein is, himself, Jewish, but is not adverse to schmoozing those with lines into the other major religious brands.
On Pope Benedict's trip to the US last year, His Excellency dropped in for the first ever papal visit to a US synagogue and met Jewish "leaders" including private-equity billionaire Stephen Schwarzman as well as the Goldman boss.
So, is Blankfein hedging his bets?

Not seeing the Sherwood for the fees

Michael "Woody" Sherwood - vice-chairman of Goldman Sachs group and co-chief exec, Goldman Sachs International - attempts to justify his bank's actions during the financial crisis in an article in The Times today.
“What is common to the investment banks, commercial banks, mortgage banks and insurance companies that failed in the past year is poor management practice,” he muses.
True, but the implication of Woody's line is that those banks that did not fail were somehow spared by good management. Nothing to do with government bail outs, then.

Betfair backs vampire squid in flotation stakes

The flotation of online betting exchange, Betfair, is a saga that has run and run. But is it now under starter's orders?
I'm told that the great vampire squid, Goldman Sachs, has been appointed to handle the £1.5bn listing...

Lucas spins right round

Goldman Sachs spinner-in-chief, Lucas van Praag, has never been this dizzy.
As the attacks on the bank pour in from publications both thoughtful (Rolling Stone) and wild-eyed (Wall Street Journal), van Praag is working double-time to keep the critics in line.
Not surprising then, that he may have appeared to contradict himself on occasion, as he tries to explain why Goldman is not actually to blame for everything from swine flu to global warming.
Sometimes, in trying to explain the unique culture of the bank which makes it so successful (it's definitely the "culture", not the government bailouts) he describes a place where ideas spring forth from bright individuals who are encouraged to speak out:
"In some other firms, nobody disagrees with the boss. Lloyd Blankfein would say that's not a luxury he enjoys," he offers to The Daily Telegraph.
On other occasions, he reckons instead that the secret is the fact that Goldmonites are a bunch of drones who all think and act alike.
"The cult of the individual, which I think has been a disadvantage to so many of the firm's competitors, really doesn't exist here," he tries.
Well, which way round is it, old son?

Warner reports that he still can't make up his mind

Jeremy Warner, the Daily Telegraph's "brilliant new columnist", still can't make his mind up about anything that matters.
Musing on the massive Goldman Sachs second quarter profits and the bank's role in the financial crisis he offers: "It’s pointless to get into the debate over Goldman’s culpability in what happened."
Why is it pointless? Surely deciding if Goldman is culpable or not is central to any description of how the bank is doing.
Warner says Goldman "rightly or wrongly is judged to have contributed to the near collapse of the banking system and a deep recession in the real economy".
Well, which is it?
As usual, Warner doesn't know, and is too timid to even venture an opinion.

Update: for a more critical view of Goldman Sachs during the credit crisis, click here.