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Goldman Sachs has reached out to its wealthy private clients, offering them a chance to invest in Facebook, the hot social networking giant that is considering a possible public offering in 2012, according to people familiar with the matter.
On Sunday night, a number of Goldman clients received an email from their Goldman broker, offering them the opportunity to invest in an unnamed “private company that is considering a transaction to raise additional capital.” Another person briefed on the deal said that Goldman clients would have to pony up a minimum of $2 million to invest and would be prohibited from selling their shares until 2013.
A Goldman spokesman declined to comment.
Facebook has raised $500 million from Goldman Sachs and a Russian investor in a transaction that values the company at $50 billion, according to people involved in the transaction. As part of its deal with Facebook, Goldman is expected to raise as much as $1.5 billion from investors for Facebook.
The email sent to Goldman clients warns that recipients who trade in secondary markets where private firms like Facebook trade may want to steer clear of participating because if they opt in they may receive material non-public information on the unnamed company that will restrict future trading.
The email said that even clients who receive the non-public information and decide not to invest would have to wait at least six months and possibly longer before they would be able to trade Facebook shares in the secondary market.
These restrictions are lifted if Facebook goes public in the interim.
Even though Facebook is not a public company it trades on secondary markets. The sellers in these markets are typically former employees of companies like Facebook and investors looking to unload their stakes. The buyers are mostly wealthy speculators looking to snag a piece of the next Apple or Google before the rest of the investing public can.
Goldman clients who opt to receive more information will receive a private placement memorandum from Goldman in the coming days. That document will confirm the company involved is Facebook, and give other more detailed information about the investment.