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Reuters: Goldman Sachs to Exclude US From Facebook Placement


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Reuters: Goldman Sachs to Exclude US from Facebook Placement

Goldman Sachs said it will limit its private placement of shares of social networking site Facebook to investors outside the United States, citing "intense media coverage." Goldman expects to raise $1.5 billion for Facebook, the wildly popular site used as a message board and for online social networking. The chance to buy a slice of Facebook ahead of any future public listing attracted widespread commentary and news coverage, which potentially could bring it under regulatory scrutiny. "In light of this intense media coverage, Goldman Sachs has decided to proceed only with the offer to investors outside the U.S.," the company said in a statement provided to Reuters. Goldman began notifying clients of its decision on Sunday. "We regret the consequences of this decision, but Goldman Sachs believes this is the most prudent path to take," the investment bank said in the statement on Monday.
Funny. Goldman didn't care about negative media reporting when they got bailed out twice by the US Taxpayer (once during the original capital injections, and a second "back door" bailout through AIG).

Oh wait, maybe it could be related to this:

Under U.S. securities law, if a company's private shares are held by more than 500 holders of record, the company is required to register with the SEC and file public disclosure statements. But the rules generally define the term "record holder" as the name displayed on the company's stock record, and not the beneficial owner of the stock.
...
Facebook said it expected to have more than 500 shareholders this year, according to documents related to the private placement, That could force the company to make public disclosures or go public as early as 2012.
Don't worry. I'm sure a pro-business politician will now use this moment to tell everyone that this is why we can't have such draconian regulation of the financial industry.
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There's a shock.. a corporation is doing what's best for itself. The funny thing is, there was 2 years recently where non pro big business politicians had complete control of Congress and the White House, in which they could have prevented something like this. I blame the Democrats.

Or I blame the Republicans for they could have done the same thing years ago.

No matter which side you take, just shows the avg joe is getting screwed.

Moral of the story, get an education, brown nose your way to the top of a corporation, and reap the benefits.

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Reuters: Goldman Sachs to Exclude US from Facebook PlacementFunny. Goldman didn't care about negative media reporting when they got bailed out twice by the US Taxpayer (once during the original capital injections, and a second "back door" bailout through AIG).

Of course they do thats why the second one was "back door".

Oh wait, maybe it could be related to this:...Don't worry. I'm sure a pro-business politician will now use this moment to tell everyone that this is why we can't have such draconian regulation of the financial industry.

Businesses do what they feel will maximize revenue and profit, not what they think will be the most benevolent decision. Maybe we should start to consider why they feel they can maximize their revenue or profits by excluding Americans.

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Is the implication here that Facebooks cash flows, sales, and expenses ugly?

Maybe they just don't want to disclose anything.

Kinda ironic for a business whose entire product concept is getting people to share their personal lives so that they can sell it to advertisers. Yes ... Facebook's product that makes it worth tens of billions of dollars is the personal information that you and your friends post there. :ols:

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Is the implication here that Facebooks cash flows, sales, and expenses ugly?

No, I don't think that is necessarily the case. Most of those details will still have to be disclosed to investors. One possible explanation for this is that Goldman doesn't want to deal with the tremendously burdensome and costly reporting requirements.

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No, I don't think that is necessarily the case. Most of those details will still have to be disclosed to investors. One possible explanation for this is that Goldman doesn't want to deal with the tremendously burdensome and costly reporting requirements.
Yeah. I guess companies don't compile that information themselves. I suppose Facebook has never gathered the information they would have to report; things like earnings, assets, etc. etc. I guess they don't practice good accounting practices, either. I think its absolutely the case; maybe they aren't ugly; but not great. Perhaps this is the excuse Facebook can use for more monetization; ie. they can say "we need to make more profit for our shareholders."

However, I really doubt US investors will be actually cut-out of the deal, since they too can set up off-shore accounts .

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Yeah. I guess companies don't compile that information themselves. I suppose Facebook has never gathered the information they would have to report; things like earnings, assets, etc. etc. I guess they don't practice good accounting practices, either. I think its absolutely the case; maybe they aren't ugly; but not great. Perhaps this is the excuse Facebook can use for more monetization; ie. they can say "we need to make more profit for our shareholders."

However, I really doubt US investors will be actually cut-out of the deal, since they too can set up off-shore accounts .

Companies spend a lot of time, effort and money to comply with US securities laws. If you think that any business can quickly assemble documents that comply with those laws, you're kidding yourself. Why do you think businesses run by very sophisticated people pay lawyers and CPAs hundreds of dollars an hour to help them comply with those laws?

---------- Post added January-18th-2011 at 11:19 PM ----------

what is facebooks' primary means of income? advertising right?

why does that seem extremely narrow to me? am i just old fashioned?

Facebook derives much of its revenue from advertising. However, I believe they also get a cut of money users spend on apps, games, and products being sold on Facebook.

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