The Giant Vampire Squid Eats Again

[Joanne98]

The Anatomy Of The Record Bonus Pool As The Foregone Conclusion: We Plug The Numbers From Goldmans Facebook Fund Marketing Brochure Into Our Models

This is part three of my opinion and analysis on Goldman’s apparent ramp up of Facebook shares in the face of, and in direct contravention to, SEC rules to the contrary. See Facebook Becomes One Of The Most Highly Valued Media Companies In The World Thanks To Goldman, & Its Still Private! and Here’s A Look At What The Goldman FaceBook Fund Will Look Like As It Ignores The SEC & Peddles Private Shares To The Public Without Full Disclosure. For the first two installments. Here I will outline the actual costs as reportedly explained in the fund marketing material, and next I will illustrate the ramp ups in actual valuation, as compared to the private equity vehicle mechanics that can prevent Goldman from taking a loss, as was illustrated in the previous piece. Before I go on, here a few interesting tidbits from the mainstream news flow:

Bloomberg: Goldman Sachs May Sell, Hedge Facebook Stake Without Warning to Investors

Goldman Sachs Group Inc. clients considering whether to buy shares in closely held Facebook Inc. should take heed: Wall Street’s most profitable securities firm could unload its own holdings without letting them know. In the last sentence of a one-page investment profile sent to private wealth clients, the firm explains: “GS Group may at any time further reduce its exposure to its investment in Facebook (through hedging arrangements, sales or otherwise), without notice to the fund or investors in the fund.”… “There may be conflicts of interest relating to the underlying investments of the fund and Goldman Sachs,” according to the Facebook offering document’s disclosures section. Material in the documents “is not guaranteed as to accuracy or completeness.”

The phrasing in bold is all an astute investor needs to know in order to come to the conclusion that Goldman itself should be treated as an adversarial trading partner. For those with shorter term memories, Bloomberg assists with the reminisce…

http://www.zerohedge.com/article/anatomy-record-bonus-pool-foregone-conclusion-we-plug-numbers-goldmans-facebook-fund-marketi



Here's the important sentence....

“GS Group may at any time further reduce its exposure to its investment in Facebook (through hedging arrangements, sales or otherwise), without notice to the fund or investors in the fund.”


Anybody this stupid deserves to get ripped off!

[xchrom]

1. recommend

[DCKit]

2. Who are they going to sell their shares to?

Other than Bernanke and Timmy, nobody else (who has ever heard of Goldman Sachs) is going to bite.

[AnneD]

3. Maybe a company that wants to ...

launder money. The point is that as long as Face Book is a private company....their books are closed from prying eyes (regulators).

[DCKit]

4. The Wall St. Casino as a money laundering operation? Couldn't happen.

:sarcasm:

[AnneD]

6. Yes, and The Carlye Group is .....

just another holding company. Right.

[TroubleMan]

5. Their own clients - they do this all of the time.

They convince their own clients to buy up their bad positions.