How can you be sure that your company is the newest darling of Wall Street? One good signal comes when Goldman Sachs invests in it. Recently, Goldman Sachs reached out to its wealthiest clients and asked if they would be interested in investing in FaceBook, which according to rumors is considering an initial public offering sometime in 2012.
According to the New York Times, on Sunday night, an email was sent to some of the bank's wealthiest clients that offered them an opportunity to invest in a private company that is considering raising further capital. Although terms of the deal are murky, sources affirm that Goldman's clients would have to invest a minimum of $2 million and would be prohibited from selling their shares until 2013.
While a Goldman spokesperson declined to comment on the matter, the bank, teaming with a Russian investor, has raised $500 million for FaceBook in a round of funding that values the company at $50 billion – higher than eBay, Yahoo and Time Warner. Currently, shares of FaceBook trade on secondary markets, but if Goldman clients choose to invest through the bank, they would have to stay clear of trading the company's shares on secondary markets as they would be privy to non-public company information.
Those clients that wish to receive more information will receive a private placement memorandum from the banking giant in the next few days, a document that will confirm the company involved is in fact FaceBook. Goldman's interest in FaceBook underscores the technology company's rapid ascendance in the past six years to a global powerhouse in social networking.