To wit, per the Times:
As part of the deal, Goldman is expected to raise as much as $1.5 billion from investors for Facebook at the $50 billion valuation, people involved in the discussions said, speaking on the condition of anonymity because the transaction was not supposed to be made public until the fund-raising had been completed.
In a rare move, Goldman is planning to create a “special purpose vehicle” to allow its high-net-worth clients to invest in Facebook, these people said. While the S.E.C. requires companies with more than 499 investors to disclose their financial results to the public, Goldman’s proposed special purpose vehicle may be able get around such a rule because it would be managed by Goldman and considered just one investor, even though it could conceivably be pooling investments from thousands of clients.
It is unclear whether the S.E.C. will look favorably upon the arrangement.
Goldman Sachs and Facebook are hoping to receive most of the benefits of public stock ownership (buckets of money), with none of those nasty disclosure requirements -- like whether the company actually makes a profit, if key executives are leaving, if directors are dumping their shares, or if the company has been sued for anything that could severely impact its bottom line.
In other words, Facebook wants you to share all of your secrets, but politely declines to share its own. If you dig too closely into its investors, you may end up accidentally falling out of a window or possibly an airplane.
Facebook isn't the only company playing fast and loose with the notion of "public." The SEC is apparently investigating the trading of private shares in hot Net companies like Twitter, Zynga, and LinkedIn. But Facebook is the great blue whale in this fish tank.
I am not a stock broker or a securities lawyer (thank God). But if someone out there in Cringeville can explain to me how this isn't illegal, I'd love to hear it.
I'm not saying Facebook isn't the greatest thing since individually wrapped slices of American cheese. But the notion that it's worth more than companies listed above without ever demonstrating to the world how much dosh those little 125-by-125 ads bring in is, well, pretty cheesy in itself.
And the pedigrees of its two closest friends make me a little green around the gills. Just sayin'.
Do you trust Facebook more or less after you know who they're in bed with? Post your thoughts below or email me: firstname.lastname@example.org.
This article, "50 billion reasons why Facebook is not worth $50 billion," was originally published at InfoWorld.com. Follow the crazy twists and turns of the tech industry with Robert X. Cringeley's Notes from the Field blog, and subscribe to Cringely's Notes from the Underground newsletter.