Goldman Sachs routinely advises CEOs to break up their companies as a means of raising stock prices.  Yet, with Goldman shares trading well below their book value of $130 a share, some analysts are thinking aloud that the firm itself might benefit by heeding its own advice and consider breaking up its various businesses. Estimates based on current market measures suggest that the sum of Goldman's individual parts are worth more than the whole.  And with coming changes to global regulatory framework, Goldman's old view that its pieces work better together may no longer be true.

e.g. - the Volcker Rule provision of Dodd-Frank requires that a bank's own money cannot make up more than 3% of a private equity fund it manages.  Currently, Goldman cash makes up about a third of its $20bn GS Capital Partners fund.  Once the Volcker Rule takes effect, it may make more sense to separate the entities to avoid cash limits.

Additionally, the firm may simply be worth more on its own.  A quick-and-dirty analysis suggests Goldman's investment banking and asset management units may be worth upwards of $51bn. With the company's $7bn stake in Industrial and Commercial Bank of China and other investments, those parts are already worth more than the firm's $55bn market cap. Those figures don't include the bank's Institutional Client Services arm, which generated 53% of revenue in the first half of 2011.  There's reason to believe Goldman could make a fair amount of money by dividing itself up.  Of course, splitting up Goldman may not be the legacy that CEO Lloyd Blankfein envisioned, but the bank has reached the point where it surely must consider it.    [NYT Breakingviews column, 9/7/11]