Facebook private offering by Goldman Sachs now excludes US Investors

By on Jan 18, 2011 in Business, Internet, Technology, United States, World Comments

Goldman Sachs decided to limit the private placement of shares of social network giant Facebook to prospective shareholders in Asia and Europe, and excluded United States investors, according to international news sites. The Facebook private offering by Goldman Sachs is expected to raise $1.5 billion for the popular social networking site.

Image Credit: Reuters/Robert Galbraith

A statement issued by Goldman Sachs said that, “In light of this intense media coverage, Goldman Sachs has decided to proceed only with the offer to investors outside the U.S..” The company “believes this is the most prudent path to take.”

Other reports suggested that Goldman Sachs‘ move maybe due to the Securities and Exchange Commission guidelines that regulate the amount of solicitation and publicity that is allowed in connection with a private offering. The decision was made known to Goldman Sachs‘ clients on Sunday, January 16, 2011. Goldman clarified, that it is the company’s sole decision to limit the offering and that no other party, like the US Securities and Exchange Commission, was involved.

Earlier reports say that Goldman had originally planned to offer private placement of Facebook in the US and offshore. However, the private offering of Facebook has attracted widespread publicity that could potentially result into regulatory scrutiny. Many believed that this is the reason why Goldman limited the private offering to non-US investors.

Earlier this month, Goldman Sachs and Russian investment firm Digital Sky Technologies has already invested to Facebook $450 million and $500 million, respectively.

Facebook, a closely held company, is the world’s largest and most popular social networking site on the internet. Reports say that Mark Zuckerberg, 26-year old founder of Facebook, is not in a rush to offer the company in public and is still hoping to preserve a free-wheeling culture.

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