Goldman Sachs American Clients Are Pissed About The Facebook Deal
Goldman Sachs Group, Inc. (NASDAQ:GS) is not having a good day. On top of reporting a quarterly profit drop of 53%, the company also has to deal with some angry U.S. clients that can no longer invest in Facebook. Yesterday I wrote about how Goldman Sachs is now only letting their international clients invest in Facebook through their special investments vehicle because of a media frenzy.
“They pushed me hard to get here and invest, and then they pull the rug out from under me,” said a wealthy Goldman Sachs U.S. client who was ready to put in $2 million. “The whole thing has left a bad taste in my mouth.” Goldman Sachs called that client on Sunday night to explain that Facebook shares would only be allowed for international clients. The company apologized for the issue.
Many Goldman clients are worried about complaining to the media since they signed confidentiality agreements that prohibit them from contacting news media agencies. Goldman Sachs and DST founder Yuri Milner invested $500 million in Facebook. Goldman Sachs also set up a $1.5 billion special investments vehicle to invest in Facebook. The reason why Goldman cancelled U.S. investors from getting in on the deal is because they were worried about government regulators.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry