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Goldman Sachs Says No Facebook Shares For US Investors
theodp writes "In 2009, Robert Cringely speculated that the day might be coming when Goldman Sachs decides the United States isn't worth dealing with anymore. Crazy, eh? Maybe not. Blaming 'intense media attention,' Goldman Sachs has decided to exclude US investors from a $1.5 billion Facebook offering. In a nicely-timed all-investors-are-not-created-equal MLK Day statement, the US taxpayer bailout beneficiary said, 'Goldman Sachs decided to proceed only with the offer to investors outside the US....We regret the consequences of this decision, but Goldman Sachs believes this is the most prudent path to take.'"
Warren Buffett and Ahmadinijad agree!
2009 http://www.zerohedge.com/article/here-why-dollar-now-effectively-worthless
2008 http://www.marketwatch.com/story/warren-buffett-says-us-dollar-worthless-if-account-deficit-persists
2007 http://www.msnbc.msn.com/id/21870271/ns/business-world_business/ ...
2003 http://www.indiadaily.com/editorial/12-16g-04.asp
Hey, if I had that many double-consonants in my full name, would I be rich, too?
"Flyin' in just a sweet place,
Never been known to fail..."
I didn't know American Citizens spelled check as 'cheque' unless I happened to be sleeping that day in school when we reverted back to British Spellings.
The US has disclosure rules that protect investors in companies that have more than 500 investors. Goldman Sachs is creating a scheme where they are the singular investor, but then other investors buy into their shares of Facebook. This prevents Facebook from having to disclose certain information that is considered critical in deciding to invest in a company or not, and allows them to sell shares without informing the public about what they're buying.
This has been on the SEC's radar as potentially totally illegal, as it pretty blatantly is designed to get around this particular rule. The rule is there to protect small investors, and help create a more fair, less manipulated playing field.
Quite frankly, whatever Facebook will become in the future, the current valuations are crazy. This is protecting US investors from taking a bath, as the rule was intended to do in the first place.
The ______ Agenda
From the past couple years, Id say if anyone gets the screwing by corporations and the government, it's the American Citizen, not the corporation. I'd say they have some sort of idea that Facebook has some sort of nasty liability (like not being worth nearly as much as they claim) that will cause them to get into more trouble like Goldman was at the start of the Economic Crisis.
I mostly agree with you. However, from the article:
"Under US securities law, if more than 500 investors hold a private company's shares, the firm is required to register with the SEC and file public statements.
The exclusion of US investors is unlikely to affect plans for Facebook to raise the $1.5bn, although it will mean some wealthy individuals and companies being denied a chance to buy into a fast-growing firm."
It kind of looks like the people who could really benefit from an IPO would already have been excluded. Just like always. So, I'm less inclined to be upset about this.
http://www.rootstrikers.org/
Ah, the day I deleted my facebook account, one of the most liberating things I have ever done.
It's a bit presumptions how they:
1) Assume you would rather "deactivate" your account (making it functionally identical to an active account AFAICT) and make you google for the actual "delete your account" link
2)Require a 2 week "pending deletion" period, during which if you log in you will cancel your request for account deletion.
Still, inconveniences aside, I would recommend account deletion to everyone. No longer will you receive dozens of invites a day to banal "spam to click" games from people you barely knew in school, no longer will you miss birthday drinking sessions because you were only ever informed via facebook (all e-mails from which going straight into your "failbook spam" folder) and no longer will you get hassle from the Mrs. when she finds out you accepted a friend request from a girl you used to date 15 years ago.
Free yourself from the tyranny of social retards today!
100x earnings... yeah, no bubble here.
And yes many people think FB is overvalued, but that should be a personal investment decision, not something the government decides for you.
The whole point of the law that G-S is so afraid to run afoul of is to ensure that people making those personal investment decisions actually have sufficient information to make a meaningful decision, rather than a gamble.
Your 2008 link has a misleading headline. The article quotes him as saying
"If our current account deficit keeps running at present levels, the dollar I think is almost certain to be worth less five to ten years from now compared to other major currencies,"
but the article headline misleadingly quotes him saying "worthless".
So to be fair to Mr. Buffett, "worth less" != "worthless"
Having said that, hopefully everybody here understands that a "dollar" has no intrinsic worth, nor is it backed by anything of intrinsic worth. So it is literally "worthless", but as long as people trade goods and services for it anyway, the great ponzi scheme goes on...
Yes - this explanation is spot-on. It's purely an attempt to avoid the decision by the SEC that the NYT article of Dec 2 (if I recall) about the offering constitutes a prospectus or is marketing (ie intentionally leaked by GS). Also, I'm pretty sure this offering is limited to a few high net worth individuals/hedge funds/etc, because Zuckerberg et al need to keep the number of public shareholders at or below 499 to avoid having to make a whole bunch of public disclosures and comply with other US regulatory nonsense designed to protect people from themselves.
Having said that, hopefully everybody here understands that a "dollar" has no intrinsic worth, nor is it backed by anything of intrinsic worth. So it is literally "worthless", but as long as people trade goods and services for it anyway, the great ponzi scheme goes on...
I can't tell if you're trolling or not. The worth of all forms of money has always come from people being willing to trade goods and services for it. Do you think the Sumerian clay tokens representing sheep and cows had intrinsic value? No, they were worth the sheep or cow someone had agreed to trade for them. Just as "worth less" != "worthless", so too "lacking intrinsic worth" != "worthless". Money always has extrinsic worth. That's what makes it money. Even money backed by gold and silver, and gold and silver themselves, are valued more highly than their intrinsic worth: they are demanded as media of exchange far above the demand for them for use in jewelry, electronics, et cetera, and the market bears a price for them far higher than if they were only valued for their intrinsic properties, in exactly the same way the market bears a higher price for US dollars than for the paper and ink that dollar bills are printed with.
"I don't care about the Constitution!" --Bill O'Reilly, November 17, 2009
The collapse of Iceland and the PIIGS has been enough to push the Eurozone to the breaking point.
Read a little more. Iceland did not bail out its banks, they let them fail (and were branded as terrorists by the UK for doing so). Iceland is NOT part of the PIIGS (the two "I"'s are Ireland and Italy). And curiously the countries that are struggling are the ones that DID bail out their banks. The economy of Iceland is actually growing again, which is more than can be said for "The Eurozone".
Seven puppies were harmed during the making of this post.
It's the difference between a fiat currency and a representative currency. The worth of the representative currency is determined by the amount of a real physical asset that is available.
The real difference is that there is a way fiat currency is commonly abused that doesn't happen with representative currency.
There is a built-in unsustainability caused by the private companies that issue fiat currency, like the Federal Reserve. When they create fiat money out of nothing, they loan it to the US Government in exchange for what is basically an IOU from the US Government. But they attach interest to each dollar they create. That means there are not enough total dollars in the system to pay back all of the debt. Therefore, the US Government cannot possibly pay back its debt. It can't ever do that, not even if the total federal budget were less than the tax revenues, because the money is loaned at interest the moment it's created.
The US Government has to borrow more money from the Fed, at interest, to make payments on the existing interest. Therefore, not only can it never get out of debt, the debt must also continue to increase.
Thus, fiat currency dollars don't represent wealth. They represent debt. If all debts were somehow paid off then there would be no money in circulation.
The difference is that representative currency dollars directly represent a specified amount of a tangible asset. They can be redeemed for that amount of that asset at any time. Their value cannot be lower than the value of that tangible asset. They represent wealth, not debt. If all debts were paid off under that system, you'd just have a lot of happy creditors. It's an inherently stable and sustainable system that doesn't require large amounts of built-in debt.
Unless some alchemists find an easy, dirt-cheap way to transmute worthless materials to gold, silver, or whatever the currency represents, then it has a value that can't suddenly disappear the way fiat currencies can (and have, several times throughout history).
It is a miracle that curiosity survives formal education. - Einstein
Why would you want to buy this? I'll tell you why: Because that first week or so the sheep will cause the price to shoot like a rocket (because they have heard of FB and know it is big) before it crashes hard when reality sets in. Kinda like how you can make a mint on a "pump and dump" if you get in at the bottom and drop them right before it starts to freefall.
But frankly when I hear the words "evil corporation" I automatically think GS. They are the kind of slime that ruin everything they touch while engorging themselves at the same time. Look at their history and you'll see bubbles as far as the eye can see going back almost to its foundation. Frankly the best thing we here in the US could do for the world is dissolve GS and throw as many of those swindlers under a jail as possible, but sadly our government is riddled with GS "alumni" that make sure their beloved GS ALWAYS comes out ahead. GS is living proof that even after 200 years the words of the great Thomas Jefferson still ring true. How sad that all those years ago he could see the truth when so many today simply bury their heads in the sand and scream "free market!" as the answer to all of the USA's ills.
ACs don't waste your time replying, your posts are never seen by me.
This article gives an overview of what Goldman Sachs will be giving investors and it isn't pretty.
The investor needs to put in at least $2mil and GS will take 4.5% in fees and another 5% of any profit earned. The real kicker is the investors can't sell until 2013, while GS reserves the right to cash out whenever they want without giving any warning. If the share price drops, GS will happily bail out, leaving their customers holding the bag. Again.
Overall it's an awful deal, unless you have a lot of cash to burn and somehow think that the Facebook of 2013 will be worth more than its currently overpriced 2011 version.
...and note that the debt to GDP ratio of the PIIGS are *better* that of the USA. Compared to the PIIGS, the USA is a mismanaged banana republic.
This seemed fishy to me when I first saw it, and it turns out that this is way off. According to the 2010 stats of the CIA World Factbook, the US has the 36th highest (public) debt to GDP ratio at 58.90%. Here are the countries of PIIGS compared to the US:
And, because it was referenced earlier,
So, rather than being worse than the PIIGS countries, the US has a lower public debt to GDP ratio than any of them, and, with the exception of Spain, is vastly lower. Also, note that the US's debt to GDP is lower than that of the UK (76.50%), France (83.50%), or Germany (74.80%). Now, that's not to say that this level of public debt is good, or that it shouldn't be lowered (it isn't and it should), but in terms of debt to GDP, the US is better off than most of the large European economies.