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Goldman Invests $450m In Facebook

Posted by ryuzaki0 on from the super-poke-me dept.

An anonymous reader writes "The news that Goldman has taken a stake in Facebook, the white-hot social networking giant, has tongues wagging from Wall Street to Silicon Valley. As first reported by DealBook, Goldman has invested $450 million in a deal that values Facebook at $50 billion. As part of the deal, Goldman is looking to raise as much as $1.5 billion from its wealthy clients to invest in Facebook alongside the firm."

52 of 228 comments (clear)

  1. Can't resist ... by johnhennessy · · Score: 4, Insightful

    Did evil just become even more evil while I was sleeping over New Years ?

    Goldman Sachs aren't exactly known for their "good values".

    Why the hell does an investment bank, who normally act as a "service provider" want to take a direct stake in a Social networking company ?

    --
    [ Monday is a terrible way to spend one seventh of your life. ]
    1. Re:Can't resist ... by Skreems · · Score: 2

      Why the hell does an investment bank, who normally act as a "service provider" want to take a direct stake in a Social networking company ?

      Because they're one of the (supposedly) hottest companies around, and don't have public stock.

      Remember, Goldman isn't just providing a service to let other people invest. That's just a way to get a larger stockpile of money that they can use to leverage themselves deep into the stock market on their own positions. They could care less about the $20 commission on your quarterly stock purchase.

      --
      Slashdot needs a "-1, Wrong" moderation option.
      The Urban Hippie
    2. Re:Can't resist ... by assertation · · Score: 3, Funny

      Maybe they decided it was about time to invest in something successful

    3. Re:Can't resist ... by phantomfive · · Score: 2

      It likely means they are about to do an IPO. Facebook has been profitable for the last couple of years, so they don't really need more investors. Goldman is willing to do IPOs or anything else that will make them money.

      Reports were in 2008 that Zuckerberg had a 3 year plan. Looks like this is the ending.

      Incidentally, Facebook is not stock I would buy, except perhaps for the initial jump after the IPO. I have trouble seeing it as a good long term growth investment. But then I've been wrong before.

      --
      Qxe4
    4. Re:Can't resist ... by Nadaka · · Score: 2

      They were right. It turns out that throwing the worlds economy into chaos and recession is fantastically profitable. Especially so when you can convince the government to cover your losses with the tax money that you avoided paying thanks to low capital gains taxes and loopholes engineered by high priced tax attorneys.

    5. Re:Can't resist ... by vlm · · Score: 2

      The value of a company is no longer what it produces and the value of their products.

      net present value calculations are fairly meaningless in an unstable environment. Also I think you're confusing the revenue line on the profit and loss statement with the net worth on the balance sheet. Play some more "railroad tycoon".

      "Value" has become something completely artificial.

      What exactly is a "non-artificial" "value"? The only answer I can even think of is some sort of revealed religious answer, like turning one dude in for crucifixion has a value of X pieces of silver, and I don't think that defined "value" is too helpful in figuring out how much Facebook is worth.

      Today, the "value" is what some people think it would be worth. Whether that has any reflection in reality is secondary.

      I would say that a closed transaction is the best, most realistic technology for finding value ever invented... Dice aren't going to work.

      how much easier does it get to imagine it when you know that you could "buy" 50 World Trade Centers for that?

      Its gets a lot easier to imagine if you think of it as, apparently in their opinion, if you have $50B laying around, the best thing to do with it at that moment is buy a Facebook. Rather than Government Motors or a huge pile of rice or whatever.

      --
      "Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
    6. Re:Can't resist ... by KarrdeSW · · Score: 2

      The only answer I can even think of is some sort of revealed religious answer, like turning one dude in for crucifixion has a value of X pieces of silver, and I don't think that defined "value" is too helpful in figuring out how much Facebook is worth.

      Really? I can think of plenty of ways that using facebook is like getting nails pounded into your body.

    7. Re:Can't resist ... by dachshund · · Score: 5, Insightful

      Why the hell does an investment bank, who normally act as a "service provider" want to take a direct stake in a Social networking company ?

      Two words: regulatory arbitrage.

      US law currently prevents Facebook from taking on more than 499 investors unless it discloses its financial results to the public. Facebook does not want to do this, but it certainly wants investment money. Plus there's a lot of dumb money out there that would love to invest in Facebook. How to get around this?

      The answer is, apparently, to take on a single investor --- Goldman Sachs. G-S will then sell "shares" of their stake to their own investors, collecting a handsome commission along the way. Most likely the investment house won't even wind up with too much exposure of its own, so when Facebook inevitably dot-bombs they'll just be sitting on a pile of cash. Plus there are opportunities here to make and return profits to their preferred clients (as the stock goes up), making sure that only the fools get stuck when it plummets.

      Normally it wouldn't bother me too much to see rich people getting fleeced, but how much do you want to bet that somehow your money will wind up in that pool, even if it's indirectly through mutual funds and third-party companies?

    8. Re:Can't resist ... by inKubus · · Score: 2

      GS didn't actually take very many losses because all the MBSs they had were hedged or insured. Funny that AIG hasn't had to pay back that $150B yet but Goldman made good in only a few months. Goldman is sitting on an absolute PILE of cash--the pile is so big they haven't even counted it yet.

      But another poster said it best--Goldman will simply run it like a private equity trade; they can't sell Facebook stock but they can own it and then sell the right to gamble on it. Seems like it it should be illegal and it is exactly how the CDOs and MBSs worked as well. It should be illegal because it's unfair to investors who only have the opportunity to play on the public market. Goldman can place all kinds of restrictions on the trading, like "you need to have an account with us for 100M or more", etc. It's actually pretty diabolical and brilliant and it's the same JP Morgan shit that's been happening in New York for over a century.

      So many companies have been taken private recently to hide this private cash from the SEC. They just take a company private, suddenly don't have to file with the feds anymore (except the IRS, which is real independent of the general bureaucracy) and just file with their state whatever minimal amount they have to. Ship it out of the country to Dubai or whatever, it's not rocket science. We got fucked, and they even fucked the government, and they still have public opinion on their side. Amazing.

      Anyway, what can we learn? Number one, the cash is still out there, plus all the money the government printed to cover the cash being dropped out of circulation. So in order to get some sort of return they are going to have to start investing in stuff. They are the lucky ones who get to spend the money first, before the multiplier decays its value. So they get the most value for each dollar by spending it now. By the time it trickles down to the little guy they have bought more land, installed more factories, bought their houses and islands cheap, etc. and the little guy gets just enough to keep up with inflation and keep him where he is, or hopefully (for the rich) a little less powerful. So, if you have any money, you should put it in stuff that the rich will buy with their cash before inflation and interest rates go up.

      And what kills me is Warren Buffet saw all this almost two years ago when he (firstly) bought GS in the dumps, preferred shares mind you, and then took the profits from that and bought burlington northern and netjets. Trains and planes. Two things the very rich use to move stuff between their factories with their low priced midwest hick labor and the city markets and planes because they gotta travel. Gold's up, not because of any safe haven mentality (ok, there is some of that) but because the rich buy lots of gold when they have extra cash.

      Not sure where I'm going with this but uh, hasn't everyone here made around 30% on the market in the past year just by buying nasdaq index or have you all been too scared? It's not hard, run away from the herd and you won't get run over. Yes, the "market leaders" will always have some time advantage but that doesn't mean you can't be there waiting when the peopel that follow the market leaders plow in their money. Facebook would be a great investment in the short term; I like long term it is....just a website.

      --
      Cool! Amazing Toys.
  2. Fools and their money.. by sstamps · · Score: 2

    Goes hand-in-hand with the modern-day Farcebook version:

    Fools and their privacy..

    --
    -SS "Teach the ignorant, care for the dumb, and punish the stupid."
    1. Re:Fools and their money.. by Seumas · · Score: 5, Insightful

      Only the American tax-payer is the fool, here. This is a can't-lose wager, for everyone else. You invest and get rich or you invest and get re-imbursed by the American tax-payer next time the government decides to save the speculators by handing them a few trillion.

      Remember, the current president and last president decided that speculation should no longer have any risk and backed that up with seven or eight trillion dollars in handouts. Hurrah!

    2. Re:Fools and their money.. by blind+biker · · Score: 2

      Only the American tax-payer is the fool, here. This is a can't-lose wager, for everyone else. You invest and get rich or you invest and get re-imbursed by the American tax-payer next time the government decides to save the speculators by handing them a few trillion.

      Remember, the current president and last president decided that speculation should no longer have any risk and backed that up with seven or eight trillion dollars in handouts. Hurrah!

      I was going to say the same, so I have nothing to add except: mod parent up!

      OK, well, there's one thing I would like to add as a commentary: this transaction is emblematic of the current US economy: speculation, criminal institutions that are too big to fail, and a social network valued at billions$.

      --
      "The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
    3. Re:Fools and their money.. by flaming+error · · Score: 2

      > Only the American tax-payer is the fool, here.

      Not sure what you mean.

      Are we fools for paying taxes? The alternative is big men with guns confiscating our possessions and imprisoning us.

      Are we fools for bailing out bankers? That choice wasn't a checkbox on our tax forms.

      Are we fools for approving the Goldman/Facebook deal? Again, not a tax form checkbox.

      Are we fools for not arming ourselves and shooting somebody? Who would you want us to shoot?

    4. Re:Fools and their money.. by brainboyz · · Score: 2

      Fire those that pass the taxes, and make it known why.

      Again, fire those that bail out the bankers, and make it known why.

      Goldman/Facebook is a private deal, but if they get bailed out then see point #2 above.

      Yes, but that's a much deeper issue.

    5. Re:Fools and their money.. by Viewsonic · · Score: 3, Insightful

      It's a good thing tax payers have made all that money back with interest then, isn't it?

      I think you forgot to mention that part.

    6. Re:Fools and their money.. by Seumas · · Score: 2

      First, bullshit. In total, the government handed out more than seven trillion dollars in emergency spending/bailouts (and in some estimates, as much as 9, 11, or even 15 trillion). TARP, which was repaid, was only a very small portion of it. And with that, the amount repaid wouldn't even cover inflation.

      Second, you're missing the point that speculation is supposed to be just that. Speculation. If we're backing investments with tax payer money, it's no longer speculation and we're even more prone to further abuses where speculators run up ridiculous valuations in the market to get rich and when it all goes tits up, nobody really has to supper except the tax-payers who, again, will rescue everyone again.

      To say that the trillions we were stuck handing out were somehow actually repaid is misleading and disingenuous.

    7. Re:Fools and their money.. by Hognoxious · · Score: 2

      Who would you want us to shoot?

      Whom, you ignoramus!

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    8. Re:Fools and their money.. by purpledinoz · · Score: 2

      That's just the TARP money. You also have to look at what the Fed is doing. Giving Loans to Goldman Sachs at 0% -> GS buys US Treasuries and pockets the interest. Tax payers lose, Goldman Sachs wins.

  3. Book value vs. Real Value by teknopurge · · Score: 2

    Aside from development I trade as a second-job.(I'd call it a hobby but hobbies cost money.) The net result of this valuation is marketing hype. Regardless who think what FB's eyeballs are worth, this is a point-in-time snapshot of FB's worth. Based on trading experience, if this was publicly traded right now I would be opening a vertical put spread.(i.e. be massively short) It feels and smells like an overrated athletic team.

    --
    Website Hosting
  4. Goldman Sachs .... Facebook .... Wall Street ... by unity100 · · Score: 5, Funny

    What could POSSIBLY go wrong ...

    --
    Read radical news here
  5. 12 billion bailout by fermion · · Score: 3, Insightful

    So our 12 billion in bailout money goes to invest a company that maybe makes a few million dollars of profit on at a least half a billion dollars in revenue. Combined with Groupon, can we say bubble? Can we say it is easy to flush money down the toilet when it is the taxpayers? Can we remember how signed TARP and the bank bailout, thereby giving all the taxpayer money to the banks and investment firms and raising the deficit to astronomical percentages of GDP. And we want to continue to give these crooks a free hand at destroying the middle class?

    --
    "She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
    1. Re:12 billion bailout by timeOday · · Score: 4, Informative

      I am not am not an expert here, but my understanding is Goldman-Sachs was the first bank to repay TARP (a year and a half ago), and the govt. made 23% interest on it.

    2. Re:12 billion bailout by Viewsonic · · Score: 3, Insightful

      People seem to leave this part out. They keep screaming about the 'bailouts' and tax payer money being 'wasted'. That money has been, for the most part, repaid, with interest. The 'taxpayers' have been making out like bandits with these 'bailouts' because they've decided they don't want the regulation that comes along with it. You take taxpayers money, you play by their rules. It's like people can't beyond the fact that these loans had some pretty heavy strings attached to them for the benefit of the taxpayers.

    3. Re:12 billion bailout by PerfectionLost · · Score: 2

      As much as we got back the money with interest from some companies, the amount of money we lost on AIG completely wipes it out. The 1.1 Billion that Goldman-Sachs payed back pales in comparison to the 50 billion of the 180 billion that they got out of the AIG bailout.

    4. Re:12 billion bailout by Jah-Wren+Ryel · · Score: 3, Informative

      People seem to leave this part out. They keep screaming about the 'bailouts' and tax payer money being 'wasted'. That money has been, for the most part, repaid, with interest.

      Baloney. Of the $550B disbursed, only $230B has been returned and that doesn't take into account the cost of money for the interim.

      --
      When information is power, privacy is freedom.
    5. Re:12 billion bailout by David+Jao · · Score: 4, Insightful

      People seem to leave this part out. They keep screaming about the 'bailouts' and tax payer money being 'wasted'. That money has been, for the most part, repaid, with interest. The 'taxpayers' have been making out like bandits with these 'bailouts' because they've decided they don't want the regulation that comes along with it. You take taxpayers money, you play by their rules. It's like people can't beyond the fact that these loans had some pretty heavy strings attached to them for the benefit of the taxpayers.

      If you count Goldman's AIG exposure, which any honest accountant must count, Goldman has not even come close to repaying the bailout money they received.

      Goldman would absolutely be bankrupt today ten times over had the government not bailed out AIG. The government's bailout of AIG was in effect a proxy bailout of Goldman. Until AIG repays every cent they received with interest, Goldman is not off the hook.

      It is, however, more than a little upsetting that cheerleaders like you so blindly accept Goldman's offloading of their liabilities onto AIG and then try to say with a straight face that Goldman has repaid their debt to the taxpayer.

  6. Demographic Data by MoonBuggy · · Score: 5, Interesting

    Why the hell does an investment bank, who normally act as a "service provider" want to take a direct stake in a Social networking company ?

    Well theoretically Facebook's "product" is demographic data for marketing purposes - Goldman Sachs obviously think this is a profitable segment. What I've said before, and will say again, is that I'll never truly believe that marketing data can provide that much value. Obviously some very successful people think differently, so it may well be that I'm just outright wrong, but when I look at the value of Google and Facebook, who might provide slightly better ways to convince people to buy your product, and compare those valuations to those of the companies who actually make popular, profitable and tangible products, it just seems like there's something not quite right here. Bubble 2.0, perhaps?

    1. Re:Demographic Data by durrr · · Score: 5, Insightful

      Some very sucessful people crashed the worlds economy, while getting filthy filthy rich at the same time.
      One mans poison is another mans profit.

    2. Re:Demographic Data by div_2n · · Score: 4, Interesting

      If FB can figure out how properly utilize the data it has to properly send target advertisements in an unobtrusive way, they will be able to do what nobody has to date -- compete with Google on the advertising front.

      This makes them supremely poised to be the ultimate competitor to Google for advertising dollars (which last I heard is the bulk of Google's profits). Note this doesn't make them a direct competitor to Google per se, but certainly it makes them capable of putting one heck of a dent in Google's bottom line.

    3. Re:Demographic Data by MoonBuggy · · Score: 5, Insightful

      That still hinges on the assumption that targeted marketing is so beneficial that it's worth all these billions of dollars. Maybe it is, maybe I'm wrong - I'm just some guy and I'm arguing with billionaires here, after all - but it looks to me like they're building something of a house of cards that'll come tumbling down if the companies purchasing the ads ever manage to quantitatively assess their impact.

    4. Re:Demographic Data by Low+Ranked+Craig · · Score: 4, Informative

      This all makes sense now. This is the real reason California, and likely other states will criminalize using bogus demographic information in your profile. If you do so you are depriving Goldman Sachs of their rightful revenue from selling your personal info, therefore you have defrauded or harmed the corporation. I mean, it's not like Goldman Sachs owns any congress critters or would ever contribute to completely fucking up an economy only to have the government write them a big check for their efforts.

      --
      I still cannot find the droids I am looking for...
    5. Re:Demographic Data by al0ha · · Score: 4, Interesting

      Everyone *thinks* Facebook's product is demographic data for marketing purposes, and at this point in history perhaps that is only what it is used for; however I would not personally feel comfortable believing this will continue to be the only use for all of the connections and information gleaned via Facebook, Google and myriad other data mining enterprises.

      The main point almost everyone is missing is that all data put in the *cloud* is there until the end of time, never to be reclaimed. That is a freaking long time peeps; and just as people could not comprehend the ability to land on the moon at the turn of the 20th century; we can not begin to comprehend the future uses, good or bad, for all the data people are currently freely giving up without a second thought. Goldman is obviously betting the payoff will be substantial; far more than mere marketing alone.

      In my lifetime we've gone from being upset when a person stood to close to the phone booth (with a closed door) while we were having a conversation, to loudly conversing and putting personal facts out there for anyone to use however they choose.

      --
      Did you ever wake up in the morning, with a Zombie Woof behind your eyes? -- FZ
    6. Re:Demographic Data by Anonymous Coward · · Score: 5, Interesting

      People still don't get it. That massive global derivatives trade that is larger than world GDP? Guess what's backing it. It's not just your savings. It's not your retirement account. It's not your mortgage. Not even your tax dollars.

      It's you.

      And anyone who can know all about you, can gain an incredible edge in the new order of global trade. In the new reality, that the world is a closed system. That the economy operates on knowable variables. And that it can be solved. They are building the Google of global finance.

      And, to do that, they've put a bullseye on your most intimate details. They want to know your business contacts. They want to know your friends. They want to know who influences your decisions. They are building a map. Forming connections. They want to know what you eat. They want to know how often you exercise. They want to know what drugs you take. What television shows you watch. They want to know how the dominos fit together. They want to know how a random person can say something to a secretary who says it to her boss which influences his perspective and brings down a major corporation, like a house of cards.

      Then they can make it happen. Bet against it. And profit. Checkmate.

      So there's quite a bit of money on the line. And somehow insurance companies aren't as useful as they once were. Somehow, the entire concept of random, evenly distributed risk probability curves has been replaced with a much more insidious, and manipulable, model. And you're right at the center. So, now, reliably modeling the global economy hinges upon controlling it's most unpredictable part: you.

  7. Reasons Why This Might Be a Bad Move by eldavojohn · · Score: 4, Interesting
    The reasons this is a great move are pretty obvious but there's some articles floating around out there that point out this might be a gamble. Reasons include:

    • We have no real idea if Facebook revenues are actually near $2 billion. The company is private and doesn't have to report numbers to anyone.
    • Groupon and its clones buy lots of Facebook ads, and we don't know if group-buying is a sustainable advertising model. Some local merchants say it kills their margins.
    • Zynga and the other social game companies are desperate to find a way to live off Facebook. Google is supposedly building an alternative.

    Regardless, it sounds like more of these privately traded shares in auctions from Sharespost will be conducted in the near future. Expect to see Facebook get a serious cash infusion if they all go as well as this one.

    --
    My work here is dung.
    1. Re:Reasons Why This Might Be a Bad Move by Animats · · Score: 2

      We have no real idea if Facebook revenues are actually near $2 billion.

      Correct. But Goldman does know. They will have had access to Facebooks' books before doing a deal like that.

  8. Man, they never listen to me by Daniel+Dvorkin · · Score: 5, Funny

    Tulip bulbs, I tried to tell them. Tulip bulbs! That's the future of finance, right there!

    --
    The correlation between ignorance of statistics and using "correlation is not causation" as an argument is close to 1.
    1. Re:Man, they never listen to me by D+Ninja · · Score: 2

      Ah...but you seem to be forgetting that the South Seas is where the investments are at! Never mind that we don't have a business plan...it's the south. And it's the seas. It must be worth something!

  9. What a relief! by digitaldc · · Score: 4, Funny

    I was so worried about facebook running out of money. Thank GOD that Goldman Sachs intervened and saved them from financial ruin.

    --
    He who knows best knows how little he knows. - Thomas Jefferson
  10. So each user is worth about $100? by McNihil · · Score: 2

    Somehow that does not seem right in any shape way or form. I know at least a handful users that have way more than a couple of accounts (pets, hiders and other stuff.)

    Maybe 25 cents/user on a good day but $100?!? Completely incredulous. But then again maybe Goldman sees the US dollar tanking worse than Titanic in the near future.

    1. Re:So each user is worth about $100? by vlm · · Score: 5, Insightful

      Somehow that does not seem right in any shape way or form. I know at least a handful users that have way more than a couple of accounts (pets, hiders and other stuff.)

      Maybe 25 cents/user on a good day but $100?!?

      Take all your physical paper junk mail and toss it into MULTIPLE trash bags for about a year. Make an intelligent estimate on paper, printing, and postage costs and multiply by the number of envelopes / catalogs / postcards / phone books. I was easily exceeding $1000/yr a couple years ago.

      Realize that my yearly junk mail is a yearly cost for an entire industry, that shows up on the P+L and cash flow statements not the balance sheet. On the other hand you're talking about ownership of a future advertising industry merely being $100 per victim. Frankly, $100 ownership cost per victim is cheap.

      Compare to the cost of buying the SuperBowel in order to sell millions per minute TV commercials.

      Another fun cost comparison is a realistic estimate of the sum of all local TV stations, at least a hundred million industry wide total to reach a million or so viewers, not so far out of line.

      Advertising is big business.

      --
      "Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
  11. Now that GS invested 1/2 billion into Facebook.... by blind+biker · · Score: 3, Insightful

    Now that Goldman Sachs has invested all this taxpayers' money into Facebook, is Facebook suddenly too big to fail? *shudders*

    --
    "The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
  12. Re:I want in by ColdWetDog · · Score: 2

    Can I invest £50 and then get £1.50 from it? I think I have found a way to create infinite money!

    Seriously though is there anything stopping me from doing this? Facebook doesn't look like it's going to fail anytime soon...

    If you already have money, it's easy to make more money. Especially if you have lots and lots of money - so much money that if you lose money, everybody else gets worried and gives you more money.

    The hard part is getting a lot of money in the first place, the rest is so easy even a banker can do it.

    --
    Faster! Faster! Faster would be better!
  13. Why do they need the money? by Fractal+Dice · · Score: 2

    A 1% stake looks an awful lot like an attempt to manufacture a good old fashioned dotcom bubble - take a website, slap a price tag on it to create the illusion of value, sell it the masses in an IPO in a little while and get out before people actually analyze the balance sheet. Is there a legitimate business need for this investment money? If they are a profitable company, can't they just use the profits? (or if the IPO is the goal, just show the balance sheet and it should speak for itself). If they are not profitable by this point, then what value is there in the business?

  14. "Exactly" by XxtraLarGe · · Score: 2

    "And does the Goldman-Sachs give him a good price?"

    "Of course not, they are the Goldman Sachs, they make their living ripping off the American people."

    --
    Taking guns away from the 99% gives the 1% 100% of the power.
  15. $450 Million = One New Facebook Data Center by miller60 · · Score: 3, Informative

    The $450 million number from Goldman is interesting because Facebook just announced plans to invest $450 million over the next 5 years in a huge new data center in North Carolina. Facebook's already spending about $50 million a year on leased data center space, and expects to spend about $200 million building its new Oregon server farm. It takes a lot of infrastructure and servers to support 500 million users.

    --
    RichM
    Data Center Knowledge
  16. Re:And this is what's wrong with "investing" today by tukang · · Score: 2

    Remember the good ol' days when "investing" actually meant "putting money in one basket to build a bigger company, to produce better products cheaper, to create more jobs"?

    FB intends to use this money to hire more developers and build out their infrastructure. How does this not fall under "creating jobs" or "building a bigger company" or "building a better product"?

  17. Re:Now that GS invested 1/2 billion into Facebook. by tukang · · Score: 2

    What taxpayer money? They repaid their bailout (as have most financial institutions) a long time ago with interest.

    I remember when the TARP was being discussed a lot of people would discuss what $700 billion could buy. Oh think about the number of schools, teachers, policemen firemen, or homeless people this money could go to. What those people failed to realize is that TARP was a loan, 90% of which has been repaid with interest.

  18. Blowing big bubble before (future) Facebook IPO by boorack · · Score: 2

    I don't believe that Facebook is worth the valuation financial media (and institutions) are touting today (>$50B). And I'm not sure Goldman intends to keep its investment in Facebook for a long time. I suppose they are trying to find as many suckers as they can, push Facebook through IPO with share price inflated several times, then sell their investment with profit to unsuspecting public, pension funds etc. (a.k.a. suckers), collect fees/profits on it and leave everyone with the bag. Watching banking sector overall and GS behavior in particular above scenario seems to be their standard business practice.

    1. Re:Blowing big bubble before (future) Facebook IPO by Anthony+Mouse · · Score: 2

      I don't believe that Facebook is worth the valuation financial media (and institutions) are touting today (>$50B). And I'm not sure Goldman intends to keep its investment in Facebook for a long time. I suppose they are trying to find as many suckers as they can, push Facebook through IPO with share price inflated several times, then sell their investment with profit to unsuspecting public, pension funds etc. (a.k.a. suckers), collect fees/profits on it and leave everyone with the bag.

      This. "Social networking" websites are not long-term investments. There was once a time when everybody thought that no one would ever catch up to the market share of AOL instant messenger. It wasn't two years ago that all the kids were using Myspace. How is Facebook different?

  19. Re:12 billion bailout - Yes, but... by dccase · · Score: 2

    But...

    They paid back the TARP with money they got from quietly selling illiquid MBSs to the Federal Reserve.

    http://dailyreckoning.com/outing-ben-bernanke/

    So, yes, the Treasury got paid back. But now there is a bunch more junk on the Fed's balance sheet that will eventually have to be written down.
    But Goldman came out OK, so that's nice.

  20. Ask Slashdot: How can I bet against this? by bigredradio · · Score: 2

    This is such a bad idea to throw more money towards an over inflated bubble. All I want to know is if I (as an average investor) can somehow bet against it? That way when the bubble bursts and goes down in flames, I can make some money.

    --
    Flexible bare-metal recovery for Linux/UNIX
  21. Hard not to make money with 0% loans by witherstaff · · Score: 3, Insightful

    They were able to use further loans from the gov to pay back the TARP funds. I know GM did this, not sure how widespread it is among TARP recipients. So they went around and got another loan, paid back the original loan, and everyone's happy.

    As to G-S, give me access to 0% loans direct from the fed and I'm sure I can make money too. Like oh, use these no interest loans to buy government bonds that return 5%.. That's right, we give these bastards money at no charge so they can turn around, buy government debt, that we as taxpayers pay back at a 5% charge. Sweet! No wonder so many NY Stock exchange board members jumped onto G-S when they became a bank specifically to allow them to get bailout money.

    Do this scam enough and the facebook money is nothing.