All things about the media, marketing, business, Japan and other musings by Mike in Tokyo Rogers.
Wednesday, January 5, 2011
Goldman Sachs in Illegal Bid to Buy Facebook
Salon Reports:
The “great vampire squid” of finance, Goldman Sachs, has invested $450 million in the emerging great vampire squid of cyberspace, Facebook…. The Goldman deal may be an end-run around the rule, with Goldman not selling Facebook shares to its clients, but rather selling shares in something it (Goldman) owns. If this is the game, and if the SEC lets it happen, the 500-shareholder rule has become meaningless — and markets are all the more opaque at a time when transparency is more needed than ever. Opacity is a growing issue. A thriving shadow marketplace has emerged for big startups that haven’t done IPOs, so big that the Securities and Exchange Commission is, at least in that space, looking into the wheeling and dealing. For good reason: Many if not most of the investors in these markets have no idea what the true financial picture may be of the shares they’re buying.
Not only that, but it looks like this is an illegal deal with Goldman (we-took-your-tax-dollars-and-gave-ourselves-record-breaking-bonuses) Sachs! !
Zero Hedge reports:
Well, the capital injection that so duly empowers Facebook is basically an uncapitalized bonus pool for Goldman Sachs. You see, it is highly unlikely that Goldman is actually materially investing in Facebook, particularly at these valuations (is facebook really worth more than Time Warner and eBay, after the private market liquidity discount?). What Goldman is doing is employing its financial engineers to allow its HNW investors to sidestep and circumvent the laws of the land as feebly enforced by the SEC. Its not as if this is a secret, it was published in the NY Times!!! Basically, Goldman has created a spit in the face of the SEC, Facebook hedge fund.
But then again, Zero Hedge goes on to explain it all in one simple sentence:
You see, this is not about Goldman’s attempt to create capital gains through investment, its about their attempt to create income through commissions, fees and spreads.
Read more.
1 comment:
Comments must be succinct & relevant to the story. Comments are checked frequently and abusive, rude or profane comments will be deleted. I’m just one of many bloggers who answer questions online and sometimes for the press. I usually handle questions about Japan, marketing or the economy, so in those areas I’m more likely to make sense and less likely to say something really stupid. If I post something here that you find helpful or interesting, that’s wonderful. This is my personal blog. If you don't like what you have read here then, just like when you go into a restaurant or bar that allows smoking, if you don't like it, there's something at the front that has hinges on it and it is called a "door."
Too bad no one gives a shit and, worse yet, doesn't do anything about it, Mike.
ReplyDeleteOh well...
With the demise of the financial security of American citizens comes a whole new era of chaos in the financial markets. When American's lose confidence in their fiat currency, the whole world will be tossed into turmoil. Watch the countries with the most gold come up on top.
...or there could be another world war so the participating countries can confiscate their citizens' gold (like what happened in WWII).
"i"