The American investigation into Goldman Sachs's four hundred and fifty million-dollar investment in Facebook could force the immensely popular social networking site to go public earlier than planned, as stated by analysts.
For the investment the thin line between private and public markets has been exposed and underscored companies' unwillingness to enter the stock market, attracting the attention of regulators.
Firms are doing everything they can do for not going public. Facebook is a burning example, as stated by James Angel of the McDonough School of Business at Georgetown University.
It has been made much more difficult in America to be a public company. It has become more expensive, the legal risks and the trading environment have also changed.
Earlier in this week, the US media stated that on top of Goldman's investment, Russian investment firm Digital Sky Technologies invested another fifty million dollars into the social networking site.
Goldman had valued Facebook at a huge amount of fifty billion dollars, which surpassed the long remaining firms like Time Warner, Boeing and Yahoo!
By the deal Facebook got allowed to tap capital markets, while avoiding some of the restrictions of trading publicly.
The big bonus for being a public company is that it is quite easy to have a trading market for ones shares, but if there exists a shadow market that provides same amount of liquidity as that of public trading market then companies will not be interested in going public, as stated by Adam Pritchard of the University of Michigan Law School.
The investment was done as a part of a move by Facebook for collecting thrice that amount of money invested outside the regulated market but has raised questions about the safety and fairness of such deals.












