According to reports from The Wall Street Journal, the Securities and Exchange Commission (SEC), the U.S. stock market watchdog, is considering amending its rules to prevent future investments similar to that performed by Goldman Sachs on Facebook. The U.S. bank has announced an investment of 2 billionth dollar (1.5 billion euros) in social network, but Goldman Sachs did not fund all: the bank will pay 500 million euros, together with the Russian company Digital Sky Technologies, the rest being provided by the bank's clients wishing to invest at least $ 2 million each.However, the U.S., any company with more than 500 shareholders is subject to a strict regime of transparency, almost equivalent to that which obtains for listed companies, with the obligation to publish its results. By opening its investment clients, Goldman Sachs will in fact exceed this threshold of 500 shareholders to Facebook, but according to current rules, only the bank will be recognized in the statement of shareholders.
Facebook, which announced its intention to go public in the future but has little incentive to do today, will therefore remain a private company. The SEC believes that the investment from Goldman Sachs circumvents the spirit of the rules, and therefore plans to make them more stringent.
In 2004, because it would cross the limit of 500 shareholders that Google has stepped up its IPO. Facebook has taken steps since 2007, several drastic measures to avoid exceeding the threshold: thus, the social network of employees have no right to sell the stock options they are distributed.
- Why Facebook Is Such an Important Friend for Goldman Sachs? [Lucas Wyrsch] (03/01/2011)
- Facebook and Goldman Sachs: Inflating a New Bubble? (04/01/2011)
- What the Goldman Sachs Facebook investment really means (04/01/2011)
- Facebook Deal with Goldman Sachs to Offer Freedom from Government Regulations, Or Not! (04/01/2011)
- do Goldman Sachs know something we hadn't already figured [Paul Clegg] (03/01/2011)
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