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Goldman Sachs Says No Facebook Shares For US Investors

Soulskill posted more than 3 years ago | from the good-thing-they-aren't-covered-in-gravy-or-there-would-be-war dept.

Facebook 529

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.'"

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So what GS is saying is.... (-1)

Anonymous Coward | more than 3 years ago | (#34911062)

Fuck the usa even though they are based in the USA? lol

Re:So what GS is saying is.... (5, Funny)

russotto (537200) | more than 3 years ago | (#34911088)

The SEC has all sorts of regulations meant to "protect" the public. Goldman-Sachs is just trying to obey them.

Re:So what GS is saying is.... (1, Insightful)

Anonymous Coward | more than 3 years ago | (#34911118)

G-S are running the government. How long before someone puts out a list of their executives names and addresses with a "surveyor's mark"?

What's the bottom line? (1)

Anonymous Coward | more than 3 years ago | (#34911330)

So what, I get some foreign proxy to buy me some? Is there really a difference?

Re:So what GS is saying is.... (3, Insightful)

Anonymous Coward | more than 3 years ago | (#34911522)

Goldman-Sachs is just trying to CIRCUMVENT them.

There. Fixed that for you.

Re:So what GS is saying is.... (5, Interesting)

tm2b (42473) | more than 3 years ago | (#34911618)

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.

Re:So what GS is saying is.... (5, Insightful)

siddesu (698447) | more than 3 years ago | (#34911320)

No, they are saying that the US has too many laws that bar advanced scams with securities, hence it is not very profitable to run such scams in the US.

But don't worry - it is very likely that whatever offer was going to be made would have excluded small investors outright; and that those US investors that would have been asked to consider buying into the fund have the offshore units that will allow them to do so now.

Re:So what GS is saying is.... (1)

blackraven14250 (902843) | more than 3 years ago | (#34911326)

No, they're saying they won't sell to US investors because of legal issues arising from the massive amounts of media coverage involved with their own investment in Facebook.

Re:So what GS is saying is.... (5, Interesting)

flyingkillerrobots (1865630) | more than 3 years ago | (#34911468)

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.

Re:So what GS is saying is.... (1)

Kernel Krumpit (1912708) | more than 3 years ago | (#34911564)

modder up.

Re:So what GS is saying is.... (5, Insightful)

jrumney (197329) | more than 3 years ago | (#34911604)

The SEC regulations for offering shares to US investors are a lot stricter than for non-US. My guess is that they cannot meet the requirements, which I would take as a big red flag that Facebook is severely overvalued right now.

Your fancy US Dollars (3, Interesting)

Jeremiah Cornelius (137) | more than 3 years ago | (#34911064)

ARE WORTHLESS!

Re:Your fancy US Dollars (3, Informative)

Jeremiah Cornelius (137) | more than 3 years ago | (#34911110)

Warren Buffett and Ahmadinijad agree!

2009 http://www.zerohedge.com/article/here-why-dollar-now-effectively-worthless [zerohedge.com]

2008 http://www.marketwatch.com/story/warren-buffett-says-us-dollar-worthless-if-account-deficit-persists [marketwatch.com]

2007 http://www.msnbc.msn.com/id/21870271/ns/business-world_business/ [msn.com] ...

2003 http://www.indiadaily.com/editorial/12-16g-04.asp [indiadaily.com]

Hey, if I had that many double-consonants in my full name, would I be rich, too?

Re:Your fancy US Dollars (1)

NicknamesAreStupid (1040118) | more than 3 years ago | (#34911550)

I am yuán to agree with you. Renminbi to sell my dollars. ¥-)

goldman is certain they would be sued and lose (2)

Dan667 (564390) | more than 3 years ago | (#34911068)

only reasonable explanation. Looks like they may be screwed any way though.

USA a minefield? (1, Insightful)

toQDuj (806112) | more than 3 years ago | (#34911078)

It seems to me from stories of colleagues and family (all outside the US), that dealing with entities in the US can be a great PITA as they tend to try to screw you in all kinds of unwanted positions. Could this have something to do with it?

Re:USA a minefield? (4, Informative)

ya really (1257084) | more than 3 years ago | (#34911190)

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.

Re:USA a minefield? (5, Interesting)

The O Rly Factor (1977536) | more than 3 years ago | (#34911310)

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.

Re:USA a minefield? (2)

flyingkillerrobots (1865630) | more than 3 years ago | (#34911490)

I think this is the likely scenario. Cue the cries of "Goldman Sachs is plotting to screw Joe the Inverstor over." Here's my advice to Joe: Don't buy into Facebook, and let GS lose out from being unable to find anyone to dump it to.

Exodus, anyone? (2, Interesting)

kronosopher (1531873) | more than 3 years ago | (#34911080)

http://i.imgur.com/Q7S47.jpg [imgur.com]
Nuff' said.

WARNING: GOATSE PIC (-1, Offtopic)

Anonymous Coward | more than 3 years ago | (#34911192)

seems on topic, but still...

Re:Exodus, anyone? (5, Informative)

Anonymous Coward | more than 3 years ago | (#34911232)

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!

Re:Exodus, anyone? (2)

Anonymous Coward | more than 3 years ago | (#34911530)

If I had a Slashdot account and mod points, I'd mod you up. Agree so hard. Especially that last bit about that Mrs.

Re:Exodus, anyone? (0)

Anonymous Coward | more than 3 years ago | (#34911542)

I have seen Facebook -- my wife has an account. I cannot perceive any significant value offered by this application. I'm not saying it's not there, I just don't understand it. I see how email provides value, I see how an automobile provides value. Facebook baffles me.

WARNING: GOATSE PIC (0)

Anonymous Coward | more than 3 years ago | (#34911390)

Just so you know

We should remember this next time (5, Insightful)

h4rr4r (612664) | more than 3 years ago | (#34911082)

We should remember this next time these assholes want a bailout.

Re:We should remember this next time (1)

timeOday (582209) | more than 3 years ago | (#34911440)

The problem is the banks have the rest of the nation by the balls. Letting them die would have started a depression. Banks are annoying, but circulating money is the lifeblood of the economy. I support (re-) separating banking from speculative investment to end the situation. I realize the two aren't entirely separable, but they could be (and used to be) much more separate than they are now.

Re:We should remember this next time (5, Insightful)

h4rr4r (612664) | more than 3 years ago | (#34911540)

If they were too big to fail, clearly they were too big to be allowed to survive. At the very least each one should have been broken up.

Re:We should remember this next time (1)

sjames (1099) | more than 3 years ago | (#34911560)

Taking possession of them and putting a new management in place would have worked though.

Re:We should remember this next time (1)

Anonymous Coward | more than 3 years ago | (#34911574)

The thing is, banks effectively quit lending once they got their bailout. They got bailouts with the implied requirement that it be used for lending, but they hoarded it and lent it back to the government. It was wrong for the legislature to not put strings on those bailout loans, but there we are.

Banks were at one time denied from the investment business, but they were allowed to do so in the name of deregulation.

Re:We should remember this next time (1)

itsenrique (846636) | more than 3 years ago | (#34911546)

But thats the problem isn't it? People only seem to remember what was on the news over the last week, if that. Or worse, just what the last convincing person told them.

In my yard (5, Insightful)

alexsoko (1868614) | more than 3 years ago | (#34911084)

Should have let them fail. Then they wouldn't be lending to any investors. If you want our money be ready to play by our rules.

Re:In my yard (3, Insightful)

siddesu (698447) | more than 3 years ago | (#34911270)

Who is this "we" you're talking about? You seriously think you (or any random amalgamation of US citizens) have more influence with Uncle Sam than GS?

Re:In my yard (3, Interesting)

fermion (181285) | more than 3 years ago | (#34911400)

And the foreclosure market would have been so screwed up it would not be likely that any bank could get enough coherent records togethers to foreclose.

So now, after millions of dollars in bonuses for executives who bankrupted the company, and hardly any money to normalize loans so that we would not neighborhood destroyed by foreclosed home, they spend money on this but lock out the people who paid for the bailout.

It could be that Facebook is at the point of Myspace, where the company is trying to cash in while it can. Goldman Sachs is trying to create a novel structure, much like the mortgage back security, in whih the real risks of the investment are hidden from the investor. This instruments sole purpose is to hide the innards of Facebook from investors. Because the money for Facebook is from the taxpayer, Goldman Sachs has almost no risk, just potential for commisions.

Re:In my yard (2)

countertrolling (1585477) | more than 3 years ago | (#34911422)

...play by our rules.

It's the Goldman Rule:

Those who have the gold, man, make the rules.

Re:In my yard (3, Insightful)

Anonymous Coward | more than 3 years ago | (#34911454)

Ironically, this is happening because they're playing by "your" rules.

SEC regulations prohibit banks from advertising or marketting private stock vehicles like the one that was created here. With all of the press of this thing, GS is concerned the SEC would view that as advertising/marketting, which would put them at risk of breaking SEC regulations.

The gotcha though, is that these regulations pertain ONLY to American Investors. So GS has decided that, in order to ensure that they're within "your rules", they can't sell these shares to Americans.

Hoisted on your own petard methinks...

-AC

Re:In my yard (1)

h4rr4r (612664) | more than 3 years ago | (#34911554)

Nope just need to fix that rule to allow the SEC to investigate this anyway.

Where's my cheque? (1)

nevillethedevil (1021497) | more than 3 years ago | (#34911090)

You know, the one for the money I loaned them via my taxes agains my will.

Re:Where's my cheque? (2, Informative)

ya really (1257084) | more than 3 years ago | (#34911158)

Where's my cheque? (Score:1)

You know, the one for the money I loaned them via my taxes agains my will.

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.

Re:Where's my cheque? (0)

Anonymous Coward | more than 3 years ago | (#34911196)

And I didn't know that the right to pay US federal taxes was one reserved for American Citizens.

Re:Where's my cheque? (5, Funny)

nevillethedevil (1021497) | more than 3 years ago | (#34911204)

I'm one of those evil immigrant types come to take your jobs and your women.

Re:Where's my cheque? (4, Funny)

h4rr4r (612664) | more than 3 years ago | (#34911276)

Have you seen our women?
If you can afford to feed one, you can have one.

Re:Where's my cheque? (3, Funny)

nevillethedevil (1021497) | more than 3 years ago | (#34911346)

If you saw what I came from you'd understand :)

Re:Where's my cheque? (1)

Anonymous Coward | more than 3 years ago | (#34911278)

It's the accent they like right?

Re:Where's my cheque? (2)

nevillethedevil (1021497) | more than 3 years ago | (#34911354)

They do seem to like my enormous British...vocabulary.

Re:Where's my cheque? (1)

ewieling (90662) | more than 3 years ago | (#34911508)

He must have missed that Billion $ check they gave the govt last year. It fully (WITH INTEREST) pays back the govt loan.

http://forexblog.oanda.com/20090723/score-one-for-the-taxpayer-as-goldman-sachs-repays-loans/
http://globaleconomy.foreignpolicyblogs.com/2009/07/22/taxpayers-earn-23-on-goldman-sachs-tarp-repayment/

Re:Where's my cheque? (1)

siddesu (698447) | more than 3 years ago | (#34911282)

Since they repaid it, it most likely went into the TARP proceedings fund, whatever it was called. And the TARP law said nothing about checks or cheques from that fund going to the general populace.

Re:Where's my cheque? (0)

Anonymous Coward | more than 3 years ago | (#34911436)

Hey now! This is a "hate the evil corporations" thread. We can't have someone interrupting it with facts!

Re:Where's my cheque? (1)

maxume (22995) | more than 3 years ago | (#34911292)

They sent it to the government. No, seriously, they are among the many large banks that paid the government loans back.

You need to complain about the terms Goldman Sachs got from AIG while AIG was in de facto government receivership.

Re:Where's my cheque? (1)

h4rr4r (612664) | more than 3 years ago | (#34911576)

Loans that were given at far below market rates. Which means the taxpayer could have made more money on those loans or via other investment. No matter how you slice or spin it this was a huge free money give away to the banks.

Re:Where's my cheque? (1)

Skreems (598317) | more than 3 years ago | (#34911474)

You know, the one for the money I loaned them via my taxes agains my will.

Paid back to the same ones who loaned it nearly 2 years ago.

Can we please remember this (0)

Anonymous Coward | more than 3 years ago | (#34911092)

The next time they get in trouble.

oh really? (4, Insightful)

Libertarian001 (453712) | more than 3 years ago | (#34911094)

We bail you out of from your greedy stupidity and this is your thank you? Looks like someone needs their corporate charter revoked.

Re:oh really? (4, Informative)

Concerned Onlooker (473481) | more than 3 years ago | (#34911198)

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.

Re:oh really? (5, Interesting)

Chyeld (713439) | more than 3 years ago | (#34911364)

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.

Re:oh really? (0)

Anonymous Coward | more than 3 years ago | (#34911594)

GS has already indicated to its investors that they need a minimum investment of US$1,000,000 in order to get in on this deal.

They told Facebook they'd raise US$1.5BN, and already they have received commitments for US$7BN. Restricting this to offshore investments won't diminish their promised return.

-AC

Re:oh really? (2)

mobets (101759) | more than 3 years ago | (#34911256)

Why is every one so angry about the inability to invest in Facebook? Seems like a good thing to me.

Re:oh really? (2)

coaxial (28297) | more than 3 years ago | (#34911518)

We bail you out of from your greedy stupidity and this is your thank you? Looks like someone needs their corporate charter revoked.

Nah, the little people got used by the rich class as always. The real lesson from the economic collapse is that Marx was right.

Securities Laws (0)

Anonymous Coward | more than 3 years ago | (#34911112)

This is because of the publication of the offer. They won't fall into the exceptions for the private placement and thus doesn't want to mess with an SEC investigation or sanctions. I wouldn't blame Goldman, blame the media.

Re:Securities Laws (1)

vijayiyer (728590) | more than 3 years ago | (#34911512)

Mod parent up! The first intelligent post based upon reading TFA.

Perhaps it's a simple strategy... (1)

bagofbeans (567926) | more than 3 years ago | (#34911122)

...to alleviate post-offer depression in the price, but there's a sizeable market of US investors who want to get in, and that'll keep the prices up for a while. Of course, initial investors can sell some then, for instant profit.

And so... (1)

hackus (159037) | more than 3 years ago | (#34911132)

OFF WITH THEIR HEADS.

-Hack

I guess the very people who bailed them out... (3, Insightful)

geekmux (1040042) | more than 3 years ago | (#34911150)

...are now too good for them?

Man if that doesn't spell out the textbook definition of pretentious cocksucker, I don't know what does...

FaceValue (0)

Anonymous Coward | more than 3 years ago | (#34911156)

Everyone knows the FaceBook offering isn't worth the FaceValue.

Nice selective editing! (5, Insightful)

Bill, Shooter of Bul (629286) | more than 3 years ago | (#34911160)

The missing part of the statement as reported by the wallstreet journel

Goldman Sachs concluded the level of media attention might not be consistent with the proper completion of a U.S. private placement under U.S. law.

Basically they think that offering it to us based investors may break a securities law. While they might be lying, it should have at least been in the summary.

Re:Nice selective editing! (1)

Dracos (107777) | more than 3 years ago | (#34911306)

More likely they think that the US media attention could expose shady aspects of the deal.

This is Goldman after all... the investment firm that has profited from every financial downturn since the Great Depression.

Re:Nice selective editing! (1)

Kenja (541830) | more than 3 years ago | (#34911336)

Thats what I thought as well. Wasn't the whole point in this that they're taking investors without disclosing their financials?

Please capitalize "US" (0)

Anonymous Coward | more than 3 years ago | (#34911478)

Basically they think that offering it to us based investors may break a securities law.

Listen, it's 8:51 PM where I am. I'm tired.

I read the sentence as 'us based investors'. Based investors? I don't know what that means so I guess I'm not one of the 'based' investors because I don't know who you 'based' investors are; therefore, you wouldn't consider me to be "one of us".

Thinking it was a typo for 'biased', I wondered how biased an investor you are. it would make sense - investors biased against Goldman Sachs; which therefore, I would be one of those investors. But how would a biased investor break securities law I wondered? We're all biased. So how?

Then again, I see if I capitalize 'us' it's US as in United States. But I realized something, if I read it as all three, then your message becomes completely clear which makes me one of them.

A Way To Get Around Regulations (5, Informative)

cgenman (325138) | more than 3 years ago | (#34911166)

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.

Re:A Way To Get Around Regulations (1)

Pharmboy (216950) | more than 3 years ago | (#34911258)

Go G-S is trying to be good guys, and pay back the US taxpayer by screwing everyone but US investors?

Re:A Way To Get Around Regulations (3, Informative)

blackraven14250 (902843) | more than 3 years ago | (#34911348)

Jeez, WTF is with all you guys and the "Why don't they pay back their loans" bit? GS paid back their loans plus interest a while ago already.

Re:A Way To Get Around Regulations (0)

Anonymous Coward | more than 3 years ago | (#34911514)

Jeez, WTF is with all you guys

Don't confuse us with mere facts! We enjoy bitchin' about financial institutions. Of course none of this would be happening if we still had the gold standard!

Re:A Way To Get Around Regulations (3, Interesting)

Pharmboy (216950) | more than 3 years ago | (#34911598)

You lack imagination. They owe more than the money they borrowed, any company that leaned on the taxpayer does. Any time a company wants to privatize profits but make losses at the risk of the public, there is a debt beyond cash.

Re:A Way To Get Around Regulations (5, Insightful)

panda (10044) | more than 3 years ago | (#34911370)

No. G-S are not "trying to be good guys." They are trying to make money in a scam investment in a way that is illegal in the U.S. They are obeying U.S. law to avoid being sued or whatever. This is purely a cover-your-ass move.

CYA (2)

sulphurlad (772436) | more than 3 years ago | (#34911168)

They are just covering their asses, the Facebook IPO is just a scheme, so the guys that started it can cash out and run. By offering it only to 'investors' outside the US, they limit their exposure to law suits and shit....

Re:CYA (1)

mattack2 (1165421) | more than 3 years ago | (#34911298)

Except that Zuckerberg has had many chances to 'cash out' for obscene amounts of money already.

(I tried to find better citations, but http://technology.timesonline.co.uk/tol/news/tech_and_web/the_web/article2134328.ece [timesonline.co.uk] from July 25, 2007
says they "would consider a buyout offer in excess of $10 billion", and various other 'reported' offers previous to that.)

this is the most prudent path to take. (2)

countertrolling (1585477) | more than 3 years ago | (#34911182)

Absolutely. To avoid expensive lawsuits when it turns sour. And to evade investigations from the US regulators. Very prudent indeedy.

Hmmm (1)

DaMattster (977781) | more than 3 years ago | (#34911208)

I would probably have more to say on this one but Goldman-Sachs and Facebook are both evil. I wish they would just cancel each other out!

Zuckerberg rape allegations in 3...2... (1)

mykos (1627575) | more than 3 years ago | (#34911214)

Maybe a couple of "Zuckerberg has a big ego" pieces to get some of the people who see through the sex crime allegations, too.

That's how we roll.

Of course (1)

Strange Ranger (454494) | more than 3 years ago | (#34911260)

Facebook is an American company. Americans are notoriously not so enthralled with Wall Street OR Goldman at the moment.
Americans (don't give me that USian crap, "America" is the name of the country), are most likely to read about privacy issues and most likely to distrust Wall Street and "Corporate America" right now. Why wouldn't they exclude us in the initial rounds of this? Well they think we're the most skeptical of course. We're bad for price inflation. Now Italy, Egypt, New Zealand, Japan, China, to them Facebook is an American juggernaut. If Americans are excluded, heck that's like doing everybody else a favor. They're buying stock in the business model that's making most of it's money harvesting American data. Woohoo!!
If they exclude us, then we can't temper the exuberance.

Goldman Sachs is like the Corleone family of finance. Only infinitely more entrenched in Washington and Wall Street. They know exactly what they're doing.

Like animals before an earthquake. (5, Insightful)

orphiuchus (1146483) | more than 3 years ago | (#34911290)

Is anyone else noticing that all of those subhuman corporate entities and economists have been freaking out a lot lately? Making weird decisions, hiding under the table, chasing their tail, moving investments out of the US? I think they sense some incoming disaster that we humans wont see until its too late.

144A investments (1)

videoBuff (1043512) | more than 3 years ago | (#34911296)

Quite possible, GS may be telling the truth here about "intense media coverage." GS folks may not be saints in any sense of the word, but in public perception in US, everything they do currently is unholy. If some US investor looses money in this venture, GS will certainly be blamed, if not sued. Then again, GS may be doing US investors a favor, if Facebook follows MySpace trajectory.

Good (5, Insightful)

dachshund (300733) | more than 3 years ago | (#34911308)

What Goldman was doing was essentially illegal in the US. Facebook is a private company and without opening it's books such a company can't take on more than 499 investors. To skirt this requirement Goldman was acting as a single "investor" but actually just planned to sell shares of it's stake on to it's clients (with hefty commissions). This is a violation of the spirit and possibly the letter of the law, and the SEC stepped in. To take the heat off Goldman is now going to run their scam outside of the US where presumably it's legal.

And yes, this probably is a scam. There are good reasons not to allow public investment in opaque ventures whose value can't be determined, and Goldman is clearly banking on charging oversized commissions because it's selling a product you can't get anywhere else (cause it's illegal, hmm). The first investors will make loads of cash just like in any pump and dump scheme, the suckers will get rolled. The Facebook guys get to cash out, turning some of those pretend billions into real dough before the company goes Myspace. Worthwhile tech ventures will go underfunded and even larger numbers of (dumb) investors will lose confidence in the markets.

Re:Good (2)

i_want_you_to_throw_ (559379) | more than 3 years ago | (#34911396)

I so wish I could mod this to 6.

Re:Good (3, Funny)

Z34107 (925136) | more than 3 years ago | (#34911626)

Going public means having to comply with Sarbanes-Oxley [techdirt.com] . Compliance is an entire industry unto itself, so the law of unintended consequences happens:

  • Small companies can't afford to go public... so they don't. The IPO market is strangled, and Thee Little Guy is no longer regulated because he no longer exists.
  • Large companies can comply... if they want to. SarbOx is expensive enough that a scheme like this is actually profitable in comparison. The Big Guy is no longer regulated, because he has an army of lawyers to smuggle his shares out of the country in their rectums.

Without SarbOx, something this complicated and dangerously-close-to-illegal would just be stupid, and Facebook would be publicly traded, with all the oversight that entailed. But, maybe all that extra regulation everyone's dodging already prevented a second Enron~

Nope, they just can get more $$ overseas (1)

Jeff1946 (944062) | more than 3 years ago | (#34911314)

Lots of big bucks overseas looking for a place to spend it.

Multiplicity of Standards (3, Insightful)

cosm (1072588) | more than 3 years ago | (#34911324)

Before everybody goes all gung-ho against G-S for this move, think of how many of you would also comment along the lines of "Who would invest in Facebook? It is just another bubble waiting to burst." I'm not qualifying anything there doing, I'm just sayin...

Call it: the social bubble (1)

MrJones (4691) | more than 3 years ago | (#34911356)

Facebook does not cost that much, its a new bubble. Banks looove bubbles and crisis, only they win in those situations

Personal information in foreign hands... (0)

Anonymous Coward | more than 3 years ago | (#34911358)

Isn't it hilarious that Goldman Sachs wants to sell a company that contains the citizens of America's personal information to foreign interests and doesn't want to include Americans in on the sale. Hmmm....

Priavte share trading... (0)

Anonymous Coward | more than 3 years ago | (#34911366)

I once saw an interview with Zuckerberg (possibly on BBC's click, I don't honestly recall) where he was positively gleeful in refusing to disclose any information about facebooks finances, citing this as being a primary advantage of a private company. I honestly don't think he will float facebook, certainly not before he is looking to jump ship, in which case who the hell is going to want to buy his shares.

My thinking on this is that Zuckerberg went to G.S. looking to raise $1.5B, but flatly refused to offer public stock. G.S. have now since realised that that to raise this much is going to require selling stock to more than 500 investors, and that doing so while remaining a privately traded company in the US is legally difficult, and thus the assumption that by excluding US citizens from the offering they can sidestep the legal requirements for disclosure. They probably took the job on in good faith (or whatever passes for it in investment banking) assuming they could find 150 guys willing to sink $10M a piece, but found a market that still lies awake at night thinking about how badly it got burnt in the dot-com crash, and no-one in their right mind prepared to drop that kind of cash into a company that doesn't sell anything.

Re:Priavte share trading... (1)

jcr (53032) | more than 3 years ago | (#34911406)

selling stock to more than 500 investors, and that doing so while remaining a privately traded company in the US is legally difficult,

Try impossible. SEC rules on registration requirements don't offer any wiggle room. If you have 500 shareholders and over $10M in assets, you're public.

-jcr

Re:Priavte share trading... (1)

h4rr4r (612664) | more than 3 years ago | (#34911600)

Which is why they are doing it this way. This is a scam, they sell billions in this worthless company then when it fails so sad too bad. If they had to open the books the cat would be out of the bag.

If you don't like US rules.... (1)

i_want_you_to_throw_ (559379) | more than 3 years ago | (#34911386)

then circumvent them, which is what GS is good at doing.

If Goldman Sachs had proceeded with the sale to U.S. investors, there was a risk that regulators could later conclude that media coverage had violated rules for a private placement. If that had happened after the deal, Facebook might have been told to repurchase shares or register as a public company.

FB is wanting to stay as private as possible. Nothing wrong with that.

Re:If you don't like US rules.... (1)

h4rr4r (612664) | more than 3 years ago | (#34911612)

There is when you are doing as a scam. They want public investment, but not to be a public company. You do that when you are selling something is that worthless. If they don't know the bag you're selling has a cat not a pig in it you can get a lot more for it.

Yes GS is bad, but... (3, Insightful)

GatorSnake (1978412) | more than 3 years ago | (#34911430)

And of course the post is immediately accompanied by the normal GS-bashing. Hate GS all you want, but this is a tangible example of the US losing its competitiveness to other jurisdictions due to its complex and outdated regulatory regime. Investment opportunities that could have been had by US investors will now go to foreigners. And yes many people think FB is overvalued, but that should be a personal investment decision, not something the government decides for you. This trend will make it increasingly difficult for companies to raise capital in the US. Not a problem for FB as they can source from anywhere, but smaller shops should definitely be concerned by this. And now back to the GS Is Evil channel...

Re:Yes GS is bad, but... (2)

vijayiyer (728590) | more than 3 years ago | (#34911538)

Wow, a voice of reason in the middle of a mob

Nuked for V-sync (0)

Anonymous Coward | more than 3 years ago | (#34911466)

Sounds similar to the actions of several Private torrent trackers recently.

goldman sucks (0)

Anonymous Coward | more than 3 years ago | (#34911504)

As a tax payer in the US I say to Goldman Sachs -- screw you, give me my money back and the money you made off my money while the idjits at the Fed had lent it to you.

New law proposal (0)

Skapare (16644) | more than 3 years ago | (#34911536)

My new law proposal (which will, of course, as any law does, piss off Republicans ... but that is why I like to propose new laws ... because it pushes their buttons) is that if a stock offering cannot be made to US investors, then it cannot be made at all for any US based company.

Clearly GS is just trying to pressure Congress to remove all laws, so they can proceed to screw everyone. The counter action is to boycott GS and FB.

Oh, and that law would never pass, of course. But it's always fun to push buttons on Republicans and get them to react.

In related news ... (1)

PPH (736903) | more than 3 years ago | (#34911556)

... Wikileaks publishes details [slashdot.org] of foreign bank accounts held by US citizens. Which is pretty much in keeping with IRS/Treasury policy.

US investors are feeling more like airline passengers lined up for a TSA fondle all the time. FB isn't interested in the regulator's bullshit and I don't blame them.

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