Posted by: tristar3research | January 4, 2011

Facebook’s pre-IPO Flaunts the SEC Securities Laws Thanks to Goldman@!%$

Okay, Goldman is party-ing again like its 1999! Woo Hoo! Virtual Debt Piles Up in Zenga Debtors!

Virtual Zenga Debt Booms!

As if the absurd bonuses are justified by the zero risk ticker boy errands that Goldman runs for the private banker Fed, then comes more SEC humiliation. “Hey, let’s rig a ‘Special Purpose Vehicle’ that exploits the 499 investor limit on high net worth deals and bubble up a $50B valuation for Face(steal)Book! We’ll make almost $3B in “commissions” for a Ponzi scheme. These speculators get material non-public information (according to DealBook’s Andrew Ross Sorkin) and all lockups, trading restrictions, and prohibitions are LIFTED “if” the company in question goes public. Of course, there’s ALREADY a secondary market for Facebook, Sorkin confesses.

Into the bubble stream, the “orderly aftermarket” will propel the Facebook valuation over $100B!! Let the retail investor be the sucker AGAIN! HAHAHAHA!”

Wall Street's Stock Market Manipulation is a Monster Bubble that Dwarfs 1999's Tech Absurdity

According to the NY Times, “Goldman Invests in Facebook at $50 Billion Valuation.” This investment (along with a reinvestment of $50 million by Digital Sky Technologies (a Russian investment firm already invested to the tune of $500m) catapults Facebook into a competition with other new media companies like Google, Twitter and others in the over-hyped “social media” space. Oh, these sites are time sucks and expose a lot of your private information (to everyone) but the data can be aggregated and sold expensively to marketing firms (with your tags on your preferences, regardless of your permission settings) or ol’ Uncle Sam (without your permission, just Homeland (In)Security- don’tcha know??)

Well, someone at ZD-Net (a computer industry publication) has figured it out. Dennis Howlett’s article over at ZD-Net points out the insanity:

“Serious question here: neither article indicates what exactly gives Facebook it’s value. In my post to the other article, I assumed it is advertising, but I can’t even justify $50M on that business model. What exactly is being valued at $50B? Someone please explain this to me. Or is it indeed a pump and dump?”

Reggie Middleton is right on in his analysis that this is nothing more than a commission generation scheme, oh, and the HOUSE (i.e. Goldman) ALWAYS WINS:

Commissions of $3B Bypass SEC Regs

“Ya Damn skippy, sailor. Howlett hit it right on the head. What type of revenues, profits and growth justify a $50 billion valuation for a very young, private company with sparse net cash flows? The type that are marketed by those who are doing God’s work! now, let’s build on Mr. Howlett’s and Dignan’s ideas the BoomBustBlog way. We shall begin with the $1.5 billion dollar fund that Mr. Howlett alleges GS is creating around the Facebook cash injection. Yesterday’s BoomBustBlog rticle, Facebook Becomes One Of The Most Highly Valued Media Companies In The World Thanks To Goldman, & Its Still Private! clearly detailed why and how many of these private equity and client funds routinely gut investors (we’re talking up to 92% in losses!) while Goldman (and other GPs) still walk away with profits (see Even With Clawbacks, the House Always Wins in Private Equity Funds).”

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