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Facebook Continued . . .

January 6, 2011

I will get off this train soon (this may be the last stop);  however, one last comment, and please see the whole article in the New York Times (nytimes.com or http://nyti.ms/frjhpQ)

The authors, Andrew Ross Sorkin and Susanne Craig note that “…In the Facebook deal, Goldman is investing $450 million, at an implied $50 billion valuation. Goldman clients, however, are paying a 4 percent placement fee and a 0.5 percent expense reserve fee for their shares, as well as giving up 5 percent of gains. That means Facebook would need to be worth closer to $60 billion before they make any money…”

That is a 20% return on the investment before the investor sees a penny of paper profit to the their original investment.  That is one heck of a high water mark!

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