Facebook friends Goldman Sachs and the rich get richer
By Alexandra Reid
Facebook has raised US$500 million from Goldman Sachs and Russian investment firm Digital Sky Technologies, according to the New York Times.
The injection of cash values Facebook at about $50 billion. The social network now has a bigger capitalization than Boeing, at $48.7 billion, and Time Warner, at about $36 billion. The deal has reportedly fueled the U.S. Securities and Exchange Commission’s examination of the growing trade of privately held shares of well-known social networking sites. The concern is that Goldman is planning to craft a “special purpose vehicle” that may be able to dodge the 500-shareholder rule, which requires a company to disclose certain financial information to the public, even if it hasn’t filed for an initial public offering. Through this vehicle, the investment would be managed solely by Goldman and therefore would be considered just one investment, even though it could potentially pool investments from thousands of clients.
