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The company went public some 9 years ago and this is the first quarterly loss since.
Goldman posted a net loss of $2.12 ( $4.97 a share ) for the fourth quarter which ended November 28, but, the news that it wasn't as bad as was expected sent Goldman's stock price up 14.4% today. This jump in price helped rival Morgan Stanley also as their stock price went up 18.3%.
Why the jump in prices of stock?
The loss exceeded the average analyst target of $3.73 a share, according to Reuters Estimates, yet privately many investors feared the results could have been as high as $6 a share.
"The fear in the market was that the results would be much worse," said Walter Todd, a portfolio manager at Greenwood Capital Associates in Greenwood, South Carolina.
So how bad was Goldman's fourth quarter?
Goldman was forced to seek $21 billion in fresh capital from the U.S. Treasury, public investors and Warren Buffett's Berkshire Hathaway Inc -- and converted to a bank holding company hoping to reassure investors it could survive.
Goldman slashed its balance sheet by nearly 20 percent to $885 billion during the quarter, boosting its capital ratios and paring leverage. The bank also cut its payroll by about 2,500 employees in the fourth quarter, down about 8 percent from the previous quarter.
Morgan Stanley's fourth quarter results will be released on Wednesday. Should be an interesting read.
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