Goldman Sachs excludes US clients from Facebook shares offering
I’m not exactly certain what the heck this means. Since this is not one of those initial public offerings (IPOs), it’s not like the common man could call their broker and order up a few shares of Facebook next week anyway. The private offering was going to be limited to large institutions.
Goldman will be limiting the offering to institutional investment firms who are exclusively outside of the United States.
From The Wall Street Journal this afternoon.
Goldman Sachs Group Inc. decided to exclude U.S. clients from the private offering of as much as $1.5 billion in shares of social-networking company Facebook Inc., citing “intense media attention.”
In a statement provided to The Wall Street Journal, Goldman said the move came after officials at the New York securities firm “concluded the level of media attention might not be consistent with the proper completion of a U.S. private placement under U.S. law.”
So the United States taxpayer bails out Goldman and the large institutions in the USA can not partake in this probable windfall?
Is Goldman so freaked out and concerned about the new regulatory environment in the USA that they figure raising the funds from non-US sources – which seem to be plentiful – is the “safe” move?
The article notes the private offering would be upwards of $1.5 billion and more than $7 billion in orders have come in so far.
Payday. Big.
If you can explain this in 100 words or less in the comments section … knock yourself out. Please don’t write paragraph after paragraph.
6 Comments
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I can't explain it in 100 words or more. At first glance, it appears that a crony capitalist corporation can make billions without dealing with its cronies in Washington so why bother?
Don't Know. What I heard was SEC regs. require financial information be divulged prior to going public. Who's decision it was not to divluge? I don't know. Why? Don't know. I do know we listen to you Jim for the answer's.
Can't explain this except to say that if it goes off without a hitch, and Goldman gets minimal embarassing press, It will become a more common way of doing business in the U.S. That is, not doing business in the U.S.
It might be useful to see how many of the purchasers are foreign subsidiaries of US firms. Having said that, I am sure that the way the deal is written does not favor US-based entities owning it, It is certainly some combination of wishing to avoid US accounting or taxation rules based on the deal structure like valuation rules that can require marking to market or other methods that trigger forward taxation issues.
Sounds like Goldman Sachs is firmly in control. Especially of its customers and probably global financing.
My guess is that Goldman Sachs will expand its control beyond money.
But, wait Goldman-Sachs, I have $832.63 in my checking account just waiting to buy some FB stock. It would be more, but most of it is tied-up in gov't bailouts for the likes of you. So, how many shares of FB has Russia purchased?…<a title="Here's How Goldman Is Letting Its Wealthiest Clients Get A Crack At Pre-IPO Facebook Shares" href="http://www.businessinsider.com/goldman-dst-creating-a-special-vehicle-for-its-high-net-worth-clients-facebook-sec-january-2011-1" rel="nofollow">$500 million (& counting?)