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Goldman's Facebook Folly

Coming as a surprise to Goldman Sachs -- if on one else -- the bank's top U.S. clients are fuming over losing their chance to invest early in Facebook. "Goldman also had to contend with angry Facebook executives who were miffed that the share offering -- meant to quietly increase the Palo Alto, Calif., company's luster -- turned out to be far more public than they expected," reports The Wall Street Journal, citing sources. Earlier this month, Goldman offered select customers part of a private offering of as much as $1.5 billion in Facebook shares.

This weekend, however, Goldman announced that the shares would only be available to foreign investors. "Our view was that it would not have been prudent for Facebook or for investors to have proceeded with the offer in the U.S," a Goldman spokesman tells The Journal. Why the about-face? According to The Journal, "U.S. law doesn't allow private placements to be advertised or solicited publicly." Angry as Goldman's clients may be, however, The Journal notes that the banks still "appears to have the inside track on leading the IPO of Facebook if the social-networking site goes through with such plans as soon as April 2012."

Read the whole story at Wall Street Journal »

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