Report: U.S. investors can't share in Facebook offering
Goldman Sachs says private offering of Facebook shares, which has created a frenzy of interest, will be available only to non-U.S. clients, according to a report.
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If you live in the U.S., you can put away that $2 million you fished out of the piggy bank to invest in Facebook.
Goldman Sachs, which created a frenzy recently when it acquired a $450 million position in privately held Facebook and offered equity to clients willing to invest at least $2 million, told The Wall Street Journal today that the offering will be limited to "offshore" investors.
"The level of media attention might not be consistent with the proper completion of a U.S. private placement under U.S. law," the New York securities firm said in a statement provided to the Journal.
Executives at the firm were concerned the storm of interest created by the offering, of as much as $1.5 billion in shares of the social-networking juggernaut, might expose Goldman to regulatory vulnerability, the Journal speculated--though the firm said the move had not been required by the Securities and Exchange Commission or "any other party."
Goldman "regrets the consequences of this decision, but we believe this is the most prudent path to take," the firm told the Journal. Facebook had no comment.
Goldman started giving the news to clients in Asia on Sunday night and to clients in Europe and the U.S. today, the Journal reported. It said Chinese interest in shares has been especially high and that it's "highly likely" Goldman can manage the offering at its original size without the involvement of U.S. clients.
Potential investors must hand over funds by the end of this week, the Journal reported.
Facebook has repeatedly said it will not go public until 2012 at the earliest. The recent $450 million in funding from Goldman, along with another $50 million from Russian investment firm Digital Sky Technologies, has reportedly given Facebook a valuation of $50 billion.