Wit Capital Group Inc, the New York-based investment banking and brokerage firm that concentrates on selling securities over the internet, has won a large vote of confidence in the form of a minority equity investment from veteran bank Goldman Sachs Group LP. Goldman said Monday that it has agreed to purchase stock and warrants representing roughly 22% of Wit’s outstanding common stock – not including the shares to be issued in connection with Wit’s planned initial public offering. Goldman’s endorsement is expected to add some luster to the already highly anticipated sale of up to $80m in shares.
The terms of the deal call for the two companies to work together on a number of things, including IPOs and affinity programs for issuing clients. Their relationship will remain non-exclusive, however. At a time when banks are increasingly focusing on online activities, the deal gets the 130-year-old Goldman directly involved with a cutting edge player and one of the newest in the field – Wit began operations in September of 1997. While Goldman appears to have an interest in further internet-related investments, the company told The Wall Street Journal that it has no intention of purchasing Wit outright.
