WHEN: Today, Thursday, January 6th
WHERE: CNBC's "The Strategy Session"
Following is the unofficial transcript of Breaking News from CNBC’s Kate Kelly on “The Strategy Session” today at 12pm ET.
Here is a link to Kate Kelly’s story on CNBC.com http://www.cnbc.com/id/40947736.
All references must be sourced to CNBC.
KATE KELLY: DAVID, GOOD TO BE BACK. FIRST IN STUDIO APPEARANCE SINCE THE NEW YEAR FOR ME.
DAVID FABER: SO NICE TO HAVE YOU BACK AND NICE COLOR I MIGHT ADD.
KELLY: THANK YOU VERY MUCH, TRYING TO BRING SOME COLOR INTO 2011. SO, HERE’S THE DEAL, HERE IS WHAT I’M HEARING. GOLDMAN SACHS WAS ORIGINALLY PLANNING TO INVEST CONSIDERABLY LESS THAN THEY HAVE IN FACEBOOK AND I’M TALKING OF COURSE ABOUT THEIR STRATEGIC INVESTMENT WHICH IS REPORTER TO BE $450 MILLION DOLLARS. I’M TOLD THAT BEFORE CHRISTMAS THE DEAL WAS STRUCTURED A LITTLE BIT DIFFERENTLY, ESSENTIALLY GOLDMAN WAS GOING TO PUT IN 300. DIGITAL SKY TECHNOLOGIES, THE RUSSIAN INVESTMENT FIRM, ABOUT 50 WHICH IS WHERE THEY ENDED UP, I BELIEVE AND THERE WAS A THIRD INVESTMENT PARTNER ON THE HOOK TO COMPLETE THAT $500 MILLION DOLLAR PRIVATE CAPITAL RAISE. WHAT HAPPENED WAS THE THIRD PARTY FELL OUT AND GOLDMAN WAS FORCED TO STEP UP WITH MORE MONEY TO BRING THEIR TOTAL INVESTMENT TO 450 AGAIN TO WITH THE DSTPS FOR AN OVER TOTAL OF 500. BUT GOLDMAN WASN’T SUPER COMFORTABLE WITH THAT ADDITIONAL MONEY. THEY WERE WILLING TO GO TO 350 THEY DIDN’T LOVE GOING TO 450 SO SOME OF THEIR PARTNERS SOME INDIVIDUALS SAID LOOK, WHY DON’T YOU SYNDICATED SOME OF YOUR INVESTMENT TO US, YOU’VE DONE THAT HISTORICALLY LIKE WITH ICBC THE CHINESE BANK IN 2006, IT IS KIND OF A TRADITION, BUT IN THIS CASE IT WAS AN EFFORT TO HELP GET HOT SHARES.
FABER: DO WE KNOW WHY GOLDMAN WAS NOT POTENTIALLY COMFORTABLE BEING AT BIT OF A LARGER NUMBER, A NUMBER ULTIMATELY THAT THEY DID END UP AT BECAUSE THIS THIRD PARTY, THAT WE ARE NOT CERTAIN OF THE IDENTITY OF DROPPED OUT?
KELLY: I THINK THAT THERE WERE A COUPLE OF THINGS GOING HERE DAVID. I MEAN ONE IS THERE IS A LITTLE BIT OF ERA OF A NEW CONSERVATISM HERE, ESPECIALLY WITH THE VOLCKER RULE. THAT IS PROBABLY YEARS FROM IMPLEMENTATION BUT IT IS ONE CONSIDERATION THEY HAVE TO TAKE INTO EFFECT, RIGHT? AND THE OTHER THING IS THE TIME HORIZON ON THIS ISN’T SUPER LONG, BUT IT IS A FEW YEARS. IT IS THE END OF 2013 OR A FACEBOOK IPO, WHICHEVER HAPPENS SOONER, SO I THINK FOR VARIOUS REASONS THEY THOUGHT 300 WAS THE RIGHT NUMBER. THEY DIDN’T WANT TO GO A LOT HIGHER SO WHETHER OR NOT THE INDIVIDUAL PARTNERS INVEST AS PART OF THIS IS STILL, I HEAR A LITTLE BIT INFLUX, BUT THEY STAND READY TO DO IT IF THE MOMENT COMES.
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