Goldman May Sell Facebook Without Warning (GS)

Bloomberg reported today that Goldman Sachs GS may sell its Facebook investments without any warning whatsoever. In the last line of the Facebook investment profile, Goldman warns investors in its Special Purpose Vehicle fund, “GS Group may at any time further reduce its exposure to its investment in Facebook (through hedging arrangements, sales or otherwise), without notice to the fund or investors in the fund.” In other words, investors who think they are invested in Facebook may, at any time, not actually be invested in Facebook. Goldman Sachs' and Facebook's spokespeople did not respond to Bloomberg for comment at the time of the article. In the Facebook investment profile, Goldman Sachs did not explain the reasoning for this non-disclosure. In fact, Goldman Sachs noted, “There may be conflicts of interest relating to the underlying investments of the fund and Goldman Sachs." This story is highlighted today as other private social networking sites, such as LinkedIn, are being considered for public offerings in 2011. Although Facebook has avoided the IPO process through private investments and Special Purpose Vehicles, there are still rumors circulating about the possibility that Facebook might IPO in 2011.