I just read that according to sources close to the deal, Goldman’s Facebook investment came together over the course of the last month subsequent to a recent second market auction in which Facebook shares traded at a $50B+ valuation. In hopes of authenticating the lofty valuation, Facebook knocked on Goldman’s door. It seems to me that Facebook used second market like some drunk, cute slut at a fraternity party before taking the ugly girl to the semi-formal. So what exactly was Goldman Sachs doing for its clients as Facebook’s valuation rocketed from $11B a year ago? One thing Goldman was clearly not doing was providing its clients with an opportunity to realize Facebook’s 355% appreciation. But, I guess Goldman is now making amends by setting a sizable $2M investment minimum, charging steep fees and restricting sales for 2 years. Leave it to Goldman Sachs to arrive late to the frat party but still get a date to the formal. Had Goldman’s clients gone to the second market just six short months ago, that $2M would have already yielded them $4M in sellable stock. Perhaps next time Goldman’s clients will make a left off Wall Street and head right toward Second Street.
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