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Forget any Qualms. Goldman Clients Really Want Some Facebook.
Facebook has plenty of very rich friends, as iconic investment bank Goldman Sachs is finding out.
The Wall Street Journal reports this morning that Goldman is likely to stop selling pieces of the social networking company to its richest clients today. It had planned to sell at least until the end of the week. But wealthy investors are so eager to get their slice of the $50 billion private company headed by 26-year-old Mark Zuckerberg that Goldman is running out of its allotment. And those investors may not get as much of Facebook as they want.
The bank is allowed to sell up to about $1.5 billion worth of Facebook under a deal that also meant a $450 million investment in Facebook by Goldman.
It’s an investment that might never have happened, the New York Times Dealbook reports. Goldman Sachs Capital Partners, which invests for pensions, sovereign wealth funds, and wealthy clients, took a pass on Facebook before the larger bank decided to go ahead with its investment announced Monday. Richard Friedman, who heads Goldman Sachs Capital Partners, walked away from the deal because the valuation it placed on Facebook, $50 billion, was higher than the unit’s clients would want. That’s a sentiment that’s been echoed elsewhere since the Goldman-Facebook deal was announced.
Get more business intelligence from Portfolio.com
- Unfriending Facebook: Facebook's deals with Goldman Sachs and its clients—not to mention the company's $50 billion valuation—are raising eyebrows, ire, and scrutiny.
- Small in Size, Big on Hiring: Small companies may well be the nation's job market engine, finds a survey that says firms with fewer than 500 employees added the most new jobs last month.
- The Fight Stuff: The new war between legacy airlines like American and Delta against online travel agents like Expedia and CheapOair is over money and power, not protecting customers.
Kent Bernhard Jr. is News Editor of Portfolio.com
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