
Facebook will be forced to go public after their deal with Goldman Sachs  - dglassan
http://www.msnbc.msn.com/id/40898422/ns/business-us_business/
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scrollbar
If you think that Goldman hasn't done their homework, and consulted with their
very close buddies at the SEC, then you're crazy. These guys have proven over
the past several years in particular that they are the gods of finance, and if
there are rules and regulations in their way, they will either find a path
around them or convince government officials to craft a new hole instead.

~~~
MichaelApproved
Didn't they just recently get busted by the SEC and were not able to find a
path around the rules and fines?

~~~
lefstathiou
$550 million sounds like a big number but it represents less than 6 days of
trading profits to Goldman. It was a drop in the proverbial bucket.

[http://seekingalpha.com/article/135785-goldman-sachs-why-
are...](http://seekingalpha.com/article/135785-goldman-sachs-why-aren-t-
trading-profits-raising-any-red-flags)

~~~
yummyfajitas
Reporting it as a fraction of _trading_ profits is a confusing thing to
report.

After all, Goldman has lots of non-trading costs: buildings, salaries,
software licenses, vendor payments, etc. It was actually 15.5 days of
_profits_ for Goldman, plus the $90 million Goldman lost on the deal itself.

(Goldman wasn't just a perpetrator, they were also one of the victims. If you
believe the SEC, Goldman helped Paulson to defraud themselves as well as
others.)

~~~
phlux
>If you believe the SEC, Goldman helped Paulson to defraud themselves as well
as others.

CYA

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Mystalic
This article misses a very important point: that Facebook wouldn't be required
to start reporting its financial earnings until May 2012, 120 days after the
last day of its current fiscal year. <http://mashable.com/2011/01/03/facebook-
ipo-may-2012/>

This week's move essentially buys Facebook 16 months of time until it has to
IPO. So yes, Facebook will essentially have to go public, but it won't be for
a while.

Goldman and Facebook knew exactly what they were doing.

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gojomo
After reading this, I can believe GS & Facebook are _hoping_ the 'Special
Purpose Vehicle' lets Facebook get further liquidity while staying private,
while remaining ready for the SEC to rule against them, forcing public
reporting.

At which point, they mock-begrudgingly reveal numbers better than anyone had
expected, setting up a monster IPO as a consolation prize.

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ecuzzillo
'Move fast and break things' apparently applies to finance as well as
programming.

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jaekwon
Anybody think maybe Facebook got pwn'd by GS? As in, maybe Facebook's
financials aren't that great and they wanted the GS money. GS offers a deal
with the mock-promise that they'll deliver a special vehicle to get around the
500 IPO rule, when they really just want to flip FB shares to the public and
pre-ipo traders for a short term profit.

~~~
qq66
haha that would be classic GS. "Um sorry we were wrong about the IPO rule."
However, there is no IPO rule -- the rule only requires public disclosure of
financials, not public ownership.

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krschultz
They may be forced to disclose financials, but they can't be forced to do an
IPO. Those are two different (but often interchangeable) things. I'm not sure
if the restrictions on executives of public companies apply to all that must
disclose their financials, or only companies being _traded_ on the exchanges.

~~~
metageek
From the article:

>A reminder: If Facebook is forced to register, it will not HAVE to offer
stock to the public. But since it will be forced to disclose its financials
anyway, we expect the company will go ahead and offer up some second class
(non-voting) shares.

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BarkMore
Facebook is aware of the rule in question. The Facebook restricted stock plan
was designed so that the participants are not considered stock owners. I doubt
that Facebook went ahead with this deal without carefully examining the issue.

~~~
jonburs
FB asked for and received a waiver from the SEC for their restricted stock
plan:
[http://www.businessweek.com/technology/content/nov2008/tc200...](http://www.businessweek.com/technology/content/nov2008/tc20081120_566312.htm)

Basically since the restricted stock holders are employees that didn't
directly invest money they're not being considered as counting against the 499
limit (which to me seems perfectly fair).

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jfoutz
I enjoy boring reporting with a touch of analysis. the whole "But wait,
there's more" and "most exciting financial news EVAR" sucks.

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tocomment
Is there any reason not to buy into the IPO with a lot of money? I'm thinking,
how can it not go up with all the hype that will surround it.

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motters
Whatever Goldman Sachs motivations are, you can bet they're not good.

~~~
getsat
They're good for Goldman Sachs.

~~~
lefstathiou
the purpose of business is to make money. Goldman should have no other
priorities but it's shareholders.

~~~
3pt14159
Absent force or fraud, yes. Not sure if Goldman always makes plays absent
force or fraud though.

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anonymoushn
The law does not apply to the Goldman Sachs. Facebook will not be forced to
disclose anything.

~~~
bluedanieru
I don't know why this is getting downvoted. It's not like cynicism with
respect to the financial industry in America isn't a perfectly logical
position to... oh right HN is about 80% libertarian troglodytes who don't have
a single thought they didn't read in a book by Ayn Rand. Carry on.

~~~
redthrowaway
This comment really adds nothing to the discussion. I imagine if people were
downvoting the parent comment, it is because they made an extraordinary claim
(GS is immune to US law), without providing any evidence. We're downvoting you
because you's trollin'.

~~~
bluedanieru
Not really trolling, at least not intentionally. The parent was glib, sure,
but I see comments such as that all the time in more technical discussions on
HN and they pass unremarked or even upvoted. Yet when it happens in a
political discussion people lose their shit because we're all expected to be a
bunch of little Montesquieus around here nowadays. Fine, GS is not _literally_
immune to US law, but surely you can imagine how someone might think that, in
certain respects, _they may as well be or they appear to be_. And there is
nothing wrong with making a snarky comment to that effect when it is clearly
not meant to be taken literally.

I don't know if HN was always like this and we have more political links on
here recently, or if it's a change in membership composition, but from what I
can tell the range of allowed opinion in political discussion has greatly
narrowed over the past six months or so compared to that in technical
discussion. And that's too bad.

~~~
steveklabnik
I made a relatively anti-capitalist comment last night and got voted up. I
dislike the 'finance industry,' yet I voted your above comment (the second
one, not the original) down.

It's about how you say it, not what you say. Also, you can't particularly be
upset if the vast majority of startup founders are super pro capitalism; this
is sorta ground zero for all of that, eh?

~~~
bluedanieru
Well, I don't think there have been any anti-capitalist statements made here,
unless you consider Wall Street an example of capitalism. And, I don't see any
conflict between being a startup founder and suggesting that Wall Street does
more harm than good.

~~~
steveklabnik
I was just making an example of something that would be outside of the general
'groupthink' of HN.

~~~
redthrowaway
I've made quite a few comments that were upvoted detailing things I learned on
4chan and what I like about that site. I'd think it's safe to say 4chan is not
highly regarded around here. The key is to present your views in a way that
people on HN will appreciate, say, to satisfy their intellectual curiosity.

If I say, "4chan FTW, lulz!", I will get downvoted, and rightly so. Compare:

"I think a lot of people on HN tend to dismiss 4chan as juvenile and immature
without giving due regard to its tremendous creative potential and brand
recognition. Just look at the Cheezburger Network, a multimillion dollar
company whose sole business model is to recycle 4chan memes. Additionally, it
would be hard to name a site as seemingly pointless as 4chan that enjoys its
popularity or notoriety. Even Someething Awful, which arguably did what 4chan
does, but better, never enjoyed the number of users or visibility that 4chan
does. It's clear they're doing something right, even if they manage to piss
just about everyone off."

Now I've presented a contrarian opinion in a way that presents a clear
argument for why I hold it. These types of posts are far more palatable to
people who, really, are just looking for interesting things to think about.

