Brendan Mcdermid/ReutersGoldman Sachs sent Facebook a friend request, and Facebook accepted.
The news that the investment bank has taken a stake in the white-hot social-networking giant has tongues wagging from Wall Street to Silicon Valley. As first reported by DealBook, Goldman has invested $450 million in a deal that values Facebook at $50 billion. As part of the deal, Goldman is looking to raise as much as $1.5 billion from its wealthy clients to invest in Facebook alongside the firm.
The move is straight out of Goldman’s playbook. The firm has a long history of “friending” America’s hottest companies and chief executives. By collecting so many important friends, Goldman generates big fees.
The ancillary benefits of buying a stake in Facebook are several fold. First, it has likely established itself as the leading candidate to win the very lucrative and prestigious assignment of Facebook’s initial public offering, whenever that day comes. Then, of course, there’s secondary share offerings, mergers-and-acquisitions business and other the other banking fees that would inure to Goldman.
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