Face It: You've Been Sold to Goldman Sachs

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[For complete article features, please see original at Amped Status here.]

Why Facebook Is Such a Crucial Friend for Goldman

Goldman Sachs and Facebook have friended each other. In investing $450 million in the social networking giant, Goldman has established itself as the leading candidate to win the lucrative and prestigious assignment of Facebook’s initial public offering…. It also positions itself to reap millions of dollars in banking fees…. But Goldman’s bold move is also likely to focus the attention of regulators at the Securities and Exchange Commission, which last month began an inquiry into the surge in trading shares of privately held Internet companies. While the investment by Goldman is being hailed as a huge coup on Wall Street, the deal — in particular the investment pool being formed for its clients — could become a lightning rod for regulators and policy makers as they examine the growing shadow market in Facebook shares. [read more]

Goldman Sachs Clients Can Invest In Facebook’s IPO — But You Can’t

What’s a private IPO? It’s a mechanism in which Goldman’s rich clients can invest in Facebook. But you can’t. Seriously! One of the reasons Goldman just invested in Facebook was to create the ability for its clients to invest in Facebook–through a “special purpose vehicle”. Specifically, Goldman has bought the right to buy $1.5 billion of Facebook stock for its clients via a single private investment entity. Goldman’s clients who want to invest in Facebook will be given shares in the investment entity. And if the value of those shares rises, they’ll cash in. Voila! The private Facebook IPO. Just for Goldman clients. [read more]

Goldman Sachs’ Facebook ploy – expands a shadow stock market

The “great vampire squid” of finance, Goldman Sachs, has invested $450 million in the emerging great vampire squid of cyberspace, Facebook…. The Goldman deal may be an end-run around the rule, with Goldman not selling Facebook shares to its clients, but rather selling shares in something it (Goldman) owns. If this is the game, and if the SEC lets it happen, the 500-shareholder rule has become meaningless — and markets are all the more opaque at a time when transparency is more needed than ever. Opacity is a growing issue. A thriving shadow marketplace has emerged for big startups that haven’t done IPOs, so big that the Securities and Exchange Commission is, at least in that space, looking into the wheeling and dealing. For good reason: Many if not most of the investors in these markets have no idea what the true financial picture may be of the shares they’re buying. [read more]

Goldman Creates a Facebook Hedge Fund for HNW Clients Historically Ripped Off By Such Vehicles, Spits In Face Of SEC

Well, the capital injection that so duly empowers Facebook is basically an uncapitalized bonus pool for Goldman Sachs. You see, it is highly unlikely that Goldman is actually materially investing in Facebook, particularly at these valuations (is facebook really worth more than Time Warner and eBay, after the private market liquidity discount?). What Goldman is doing is employing its financial engineers to allow its HNW investors to sidestep and circumvent the laws of the land as feebly enforced by the SEC. Its not as if this is a secret, it was published in the NY Times!!! Basically, Goldman has created a spit in the face of the SEC, Facebook hedge fund. [read more]

Here’s A Look At What The Goldman FaceBook Fund Will Look Like As It Ignores The SEC & Peddles Private Shares To The Public Without Full Disclosure


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