Not surprisingly, some of Goldman’s rich clients are annoyed that the firm offered them shares in the hottest tech company on the planet–Facebook–and then told them they couldn’t buy them, the WSJ reports.The latter news was delivered to clients after Goldman decided to cancel the US tranche of the deal because of regulatory concerns.
One stiffed client went grousing to the Wall Street Journal, complaining that, henceforth, he or she is going to pay attention to Goldman’s high fees:
“They pushed me hard to get here and invest, and then they pull the rug out from under me,” said one wealthy Goldman client in the U.S. who was planning to invest $2 million in the social networking site. His adviser at Goldman called Sunday night to explain that the Wall Street firm would offer Facebook shares only to non-U.S. clients. Goldman worried that the media spotlight surrounding the private offering might violate U.S. securities laws and expose the firm to legal action. “The whole thing has left a bad taste in my mouth,” the Goldman client said.
One thing the client won’t do, we would venture to guess, is fire Goldman. Because if he or she fired Goldman, then he or she wouldn’t be offered shares in the next hot Goldman deal.
(Reason No. 3,456 why it doesn’t suck to be Goldman).
Meanwhile, the WSJ reports that Facebook executives are also “perturbed” about the flopped US deal, as well as all the publicity surrounding the offering (which Goldman may have had nothing to do with). This jibes with what a couple of sources told us, which was that there was considerable “frustration” on both sides.
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