Goldman Sachs Pulls Facebook Stocks from All US Investors

By Robert Davis
Jan 17 2011

Goldman Sachs said this morning that they were offering the limited number of shares in Facebook that they have purchased to non-US investors only, angering those that were already in line for the purchases.

Shares in Facebook are considered the Holy Grail of stocks from the tech market. Because Facebook is currently a private company, only those that are selected may purchase shares. As such Goldman Sachs recently dumped $500 million into the social network.

The plan for Goldman was to buy the stocks and then sell them at an inflated rate to other investors from around the world, including the US. However, their announcement this morning cut out all US investors, forcing many to buy from third parties in the overseas trading market.

Goldman said that a leak in their system had caused a feeding frenzy for the shares and they determined that it would be too dangerous and risky to allow US investors to buy the stocks. Thus they have opened the demand to the overseas market only. Early reports show that there are massive investors from the UK as well as other nearby countries.

However, Facebook has penciled in a plan for an IPO next year which could mean that just about anyone in the world can own a piece of the social network. Nonetheless, such an IPO is likely to drive the price of the stock up to a point where the casual investor will be unable to make much of a purchase.