After investing $450 million in the company and giving high-net-worth clientele one week to decide whether to make a minimum $2 million buy into a $1.5 billion “special purpose” vehicle for investing in Facebook shares, some Goldman Sachs employees are still learning how to use the social network.
Facebook Chief Financial Officer David Ebersman yesterday gave a tutorial to Goldman Sachs’ wealth management department, according to Bloomberg BusinessWeek, which cited an unnamed individual who listened into the presentation at the bank.
Goldman Sachs computers continue to block access to Facebook, with browser messages saying that “access to this site is logged and audited” and Internet use on the premises is only for “legitimate business.” Isn’t that ironic?
There’s been no indication whether the bankers have a deadline for becoming more familiar with the social network, but Reuters has said that Goldman wants clients to decide by the end of the week whether they want to participate in the special purpose investment vehicle.
As of yesterday afternoon, Goldman had yet to distribute an official private placement memorandum that would detail Facebook’s finances and the terms of the investment. Until such a document goes out, things like the minimum required buy in and the deadline for expressing interest in participating could change.
However, many Goldman clients did receive a letter on Monday with some data about the Facebook investment opportunity, including metrics comparing the site to Google.
It’s very possible that the official private placement memorandum hadn’t yet gone out specifically because of regulatory red tape. The Securities and Exchanges Commission has been investigating private-market trades of Facebook shares, specifically by sending requests for more information from buyers and sellers of the stock. Surely Goldman Sachs has been contacted in this context.
Maybe the SEC inquiry might result in pressure on Goldman Sachs to turn what would have been a $1.5 billion private placement into an initial public offering. Do you agree with this conjecture, readers? What’s your take on this issue?