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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.'"
This actually sounds pretty plausible. Remember that Facebook is a company that is valued at more than 50 billion USD, yet pulls in 500 million yearly in revenue. If it turns out that Facebook is a bubble, GS and Zuckerberg might be able to cash out quick before the stock price cashes and burns, and not have to worry about any pesky insider trading or fraud investigations being brought up by the SEC. Remember that the holdings company GS set up for Facebook is registered in a generic foreign island tax haven country.
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.
Given Facebook has all the hallmarks of being the next AOL and Mark Zuckerberg the next Steve case, I have a feeling that GS is doing the US a favor.
Maybe it's the opposite. Who knows? Maybe they actually think they woefully overvalued Facebook and decided they only want to screw over the foreigners.
"It is a good thing for an uneducated man to read books of quotations..." -Winston Churchill
And, they probably -are- protecting the public in this case...companies should not be allowed to sell shares to the public without disclosing important information about themselves.
Maybe this is the future growth export industry in the US: securities fraud of foreign nationals.
"It is our blasphemy which has made us great, and will sustain us, and which the gods secretly admire in us." - Zelazny
It wasn't the "European banks" that got hurt from the mortgage-backed bunkum. They were made whole to the tune of 100 cents on the dollar. The people who are paying for it are the same ones that are paying for it over here. You and me. Our parents. Our kids.
They are creating a "breakaway" culture, who within decades will be the only ones with access to capital, to new technologies, to advanced health care. That's the ultimate effect of the dramatic increase in wealth disparity. Fifty years of this and they'll be as far ahead of the rest of us as the American settlers were of the Native Americans. When two cultures exist side-by-side and one is so far in advance of the other, it doesn't work out well for the ones on the bottom. We are seeing evolutionary branching based on wealth alone.
You are welcome on my lawn.