Memo to WSJ DealJournal re: Facebook/Goldman

Hey Evan and Ron,

Long-time reader, first-time responder.  I’ve enjoyed the point-counterpoint between your Mean Street and Dealpolitik columns re: the Facebook/Goldman deal but I feel that the real issue is being skirted by both of you.

You guys make important points about the detriment to public markets from this arrangement and the subjectivity of the term “fairness”.  However, I think the most troubling aspect of this “private public offering” has yet to be addressed: The unfairness to OTHER companies besides Facebook.

The larger debate, the one about the present and future of capital formation, has not yet been had.  Facebook’s private IPO is yet one more example of companies, mostly in technology, raising seemingly limitless amounts of capital in the private markets.  This in and of itself is a good thing.

But when these so-called private securities begin to be traded back and forth on unregulated exchanges, what we’ve essentially done is allowed a select group of hyper-sophisticated and wealthy investors to act as though they are living on their own little Indian Reservation – with a de facto exemption from the securities laws that the rest of us are subject to.

By “us” I am not pulling the poor, small investor card.  I am referring to the “us” that also seeks to raise money, develop businesses and curry investor interest.  How can a non-social media or a non-wireless app company possibly compete for capital with the allure of banking and trading deals that are done outside the burdensome sphere of regulation and the strictures of traditional money-raising?

In short, the Goldman/Facebook private IPO is unfair – not to the the public investor, but to the entrepreneur seeking investors who does not have a 94304 zip code.

What say you?

Read Also:

Why Goldman Sachs’s Facebook Deal Is Bad for Markets (Dealpolitik)

Mean Street: Facebook and Goldman Say Tough Noogies to You (Mean Street)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. bitcoin era review 2020 commented on Sep 29

    … [Trackback]

    […] Find More to that Topic: […]

  2. DevOps consulting company commented on Nov 18

    … [Trackback]

    […] Information to that Topic: […]

  3. PG SLOT commented on Nov 25

    … [Trackback]

    […] Info to that Topic: […]

  4. What is Functional Testing commented on Nov 26

    … [Trackback]

    […] Read More on to that Topic: […]

  5. td login commented on Dec 16

    … [Trackback]

    […] Find More here on that Topic: […]

  6. scotiabank mastercard login commented on Jan 18

    … [Trackback]

    […] Find More Info here to that Topic: […]

  7. JVC GR-DVX PRO manuals commented on Jan 20

    … [Trackback]

    […] Read More Info here to that Topic: […]

  8. wigs for women commented on Jan 23

    … [Trackback]

    […] Read More on on that Topic: […]

  9. bmo canada login commented on Jan 26

    … [Trackback]

    […] Find More on that Topic: […]