Goldman to buy Folio

[latitude42]

Has anyone read about Goldman Sachs plans to purchase Folio? I wonder what effect that could have on note trading.

https://www.reuters.com/article/us-goldman-sachs-m-a-folio/goldman-sachs-to-buy-boutique-wealth-management-custodian-folio-idUSKBN22Q2RA

https://www.folioinvesting.com/folioinvesting/home/

[Fred93]

Wow.  Makes folio instantly "legit" in the eyes of many folks.  ...which sounds good for LC investors.

On the other hand, Marcus is a direct challenge to LC's business, which makes one wonder whether LC can trust GS as a partner.

But LC cares so little for the retail investor these days that they probably no longer care whether folio is a good partner or a bad partner.

[Rob L]

I wonder how much of Folio's revenue and income result from the trading platform used for LC notes (and similar assets of other companies Prosper before it ended its relationship with Folio)? If it's a small and only modestly profitable part of the business Goldman could take it internal for its products only or possibly kill it. Given Marcus it's kinda hard to imaging GS providing trading services for LC notes.

Yes, I agree LC probably couldn't care less.

[AnilG]

What surprised me more is the acquisition price which most likely is less than 500M I expected Folio to be worth much more than 500M required for disclosure of purchase price.

[Rob L]

FWIW in comparison LC's current market cap is $378M and its book value is about $800M.
Total cash is $308M or $4.41 per share. Shares closed Friday at $5.41.
Short interest is 8.7% of the float. Is Mr. Chen still a buyer?

[maerice]

Wow.  Makes folio instantly "legit" in the eyes of many folks.  ...which sounds good for LC investors.

On the other hand, Marcus is a direct challenge to LC's business, which makes one wonder whether LC can trust GS as a partner.

But LC cares so little for the retail investor these days that they probably no longer care whether folio is a good partner or a bad partner.

Thanks for the information. It really helped me!

[macroman7799]

I wonder how much of Folio's revenue and income result from the trading platform used for LC notes (and similar assets of other companies Prosper before it ended its relationship with Folio)? If it's a small and only modestly profitable part of the business Goldman could take it internal for its products only or possibly kill it. Given Marcus it's kinda hard to imaging GS providing trading services for LC notes.

Yes, I agree LC probably couldn't care less.

Maybe Goldman could have made Folio legit but instead they shut it down.

[t_b_o_t]

Maybe Goldman could have made Folio legit but instead they shut it down.

Yeah, this really, really blows.  I'm not hopeful that they'll start it back up again.