Wed January 19 2011
Goldman Partners Get Windfall Gain From Stock Options, NYT Says
Goldman Sachs Group Inc.’s 475 partners stand to reap a windfall gain from stock options they received in December 2008, the New York Times said, citing a study of regulatory filings and internal partnership documents.
The stock, which traded at $78.78 then, closed yesterday at almost $175, the newspaper said.
The almost 860 current and former partners of the firm have in the last 12 years cashed in on more than $20 billion in Goldman shares and hold more than $10 billion in stock, the Times added.
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We will study options in Intermed II this semester.
What kind of options did GS grant to its partners?
What was the strike price of the option?
What did granting the options cost GS, how would one calculate this?
How much money did the partners make and how did they make it?
Was this an exchange traded option?
What exchange if any would such an option trade on?
Does the cost of the option recorded by GS on its books bear a resemblance to what the partners actually made?
What is the rationalization for the granting of the options to this group?
I will have a tutorial on options posted in Blackboard for you. I do not believe you can begin to understand accounting for options until you can answer the above questions about how options work.
Did I mention I was a Registered Options Principal with the NASD…..
What is the definition of robber baron, Wall Street tycoon, or hmm, adviser to Presidents?
Just wondered….
Professor Elam 
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