An insufficiency of share supply was holding down Goldman Sachs shares not long after it went public in 1999. That’s why Goldman’s partners were given a chance to sell more of their shares in a secondary offering.
A lack of “float” in GS shares made it difficult for the biggest institutional investors to own a piece of the company. To buy GS shares they needed the capability to sell them, but with the float so slight, exits would be challenging. The lack of supply was paradoxically holding down investment in GS, and with it, the share price.
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