It looks as if Goldman Sachs’s $450 million investment in Facebook might put the kibosh on the growing market in trading private company stock. As reported in Euromoney’s December issue (Private stock markets – an alternative to IPOs), growth companies, particularly those in the social media sector, are increasingly delaying their IPOs and turning for liquidity to direct investments or private-stock trading platforms, such as SharesPost or SecondMarket. Now the hefty investment by the public’s most disliked investment bank into the social media darling has sparked an investigation by the SEC into pooled investment funds in pre-IPO stock.
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See also: Facebook IPO gives venture capital industry a boost |
The key query by the SEC seems to be whether private firms’ stock is held by more than 499 shareholders.
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