An IPO would also turn many Facebook employees into very wealthy people—and potential clients for Goldman’s wealth management arm.
On Wall Street, the assumption is that Goldman looks at its $450 million investment in Facebook as the entry price for becoming Facebook’s go-to banker.
It’s not strictly true that Goldman and the investors in its fund need an IPO to profit. For one thing, Goldman will make $60 million of its investment back almost immediately by charging the investors in the fund a 4 percent fee.
What’s more, Facebook could buy back the stake it's selling. But since it would likely have to turn to capital markets to raise the money for such a repurchase, that possibility is remote. More likely, the investors could sell their stakes in the fund, after the lock-up period expires, to other qualified investors in private transactions.
But make no mistake—it’s very likely that Goldman and many of its investors expect an IPO soon. And while it may be too paranoid to suspect that Goldman is planning for the SEC to use the existence of the Goldman fund to pressure Facebook into going public, that outcome probably wouldn’t cause too many at Goldman to start shedding tears.
Questions? Comments? Email us atNetNet@cnbc.com
Follow John on Twitter @ twitter.com/Carney
Follow NetNet on Twitter @ twitter.com/CNBCnetnet
Facebook us @ www.facebook.com/NetNetCNBC