Goldman Sachs once gambled with other people’s money in an unregulated market in mortgage-backed securities of dubious value. Bailed out with billions of taxpayer dollars, the company seems to have learned its lesson. Goldman Sachs is now gambling with other people’s money in an unregulated market in shares of social media company Facebook.
Since Facebook is privately held, isn’t openly traded, and really doesn’t make cash profits, there is no way to value shares of … whatever it is that is thought to comprise the firm’s assets. If shares are sold to no more than 499 parties, the transactions are not subject to regulation, and may be legally traded in yet another shadow market.
Face it: the only thing this country can manufacture these days is bad business deals.
Facebook and Goldman have dealt in another player, Moscow-based DST. Somehow, we fail to find that reassuring.
More:
“Goldman Offering Clients a Chance to Invest in Facebook,” Susanne Craig and Andrew Ross Sorkin, New York Times blog.
“Why you shouldn’t ‘like’ the Facebook deal,” David Weidner, MarketWatch.
“Goldman’s Stinky Facebook Deal,” Matt Taibbi, Rolling Stone.
“The Facebook Bubble,” Joshua Kim, InsideHigherEd blog.
“Goldman Sachs makes friends with Facebook in $450m deal,” Guy Adams, The Independent.
“Facebook Deal Offers Freedom From Scrutiny,” Miguel Helft, New York Times blog.
“You Decide: Goldman’s Facebook Pitch or Nigerian Email ‘Opportunity,'”Shira Ovide, Wall Street Journal blog.
Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com
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Tags: Facebook, finance, Goldman Sachs, Private Trading, shadow market, social media, unregulated securities
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