Goldman Sachs, Facebook and the IPO - 2012 It Is


It's official. Sort of.

According to a CNBC Report, Facebook is most likely having its IPO in the first quarter of 2012. And Goldman Sachs will be leading the way.

Not, necessarily, that Facebook particularly wants it to happen then. It's that it's going to have to - because of 'the 500 rule.'

You see, by law - the 1934 Securities and Exchange Act, to be specific - when a company has 500 investors, they can't be considered private any longer. By law, they're considered public. And that means an IPO.

Nice for Facebook, though, its valuation is coming in at over $100 billion.  Especially since, not that long ago, its valuation was only $75 billion.

Which brings us back to Goldman Sachs.  Because the game changed - and the Facebook valuation skyrocketed - when Goldman established a fund, first, of $375 million of its own and its clients' money to invest in Facebook and then an additional Facebook investment fund of $1.5 billion.  But that was for its foreign investment clients only.

Because of that pesky 500 rule...which they tried to get around by saying that with all the investors being foreign, the fund, itself, could be considered one investor!

You gotta love Goldman.   And Facebook.  They're quite the pair.

Too bad "friending" Facebook won't give you the inside track for "friends and family" share access for the IPO.  Now that would be a "Like" that everyone would want!


(Originally published on Technorati.)