With Sunday night's announcement that Goldman Sachs had invested $450 million in Facebook, one could almost hear the supple leather stampede of Ferragamo loafers beating down Lloyd Blankfein's door. After all, with Goldman's rare "special purpose vehicle," its private clients would be able to invest $1.5 billion collectively, without the SEC's oversight, in a social network that Goldman conveniently just inferred was worth $50 billion. And all for the rumored low, low cost of a minimum of $2 million and a promise not to sell until 2013. That is, if clients were willing to do it within the week and without the requisite memorandum explaining the risks.
Such is the magic of Goldman, reasons Fortune contributing editor Duff McDonald. In an article about the five reasons McDonald is not buying Facebook stock — including the troubling facts that (1) no one knows the company's actual financials, and (2) people use it to play backward games like Farmville and Cityville — he also cited Goldman's involvement as a reason to be wary. But we prefer to see McDonald's criticism as yet another reason for Goldman to be proud of being so dang vampire squid about the whole thing. Market manipulation is so baller. We're glad it's making a comeback so early in the new year.
Reuters' Felix Salmon has already pointed out that Goldman's motivation in investing in Facebook is partly to lock down the lead slot as a book runner for when the company does go public. Others have remarked that, depending on the fees that come with Facebook going public, Goldman might pay for its investment on that alone. According to Yipit founder Vinicius Vacanti, when you count them up, Goldman's strategic investments in Facebook actually value the social network closer to $36 billion. McDonald pegs it at $39 billion. Although, of course, it's in Goldman's interest to make everyone think Facebook looks like it's worth $50 billion, which might explain the rush job and lack of private placement memo.
By McDonald's hypothetical math, if Facebook offered the public a chance to buy 20 percent of the company in an IPO, that would be worth $10 billion. Goldman would earn a 2 percent underwriting fee as a book runner on that $10 billion, picking up $200 million. McDonald continues:
Goldman would have to share such spoils, so let's call it $100 million into their pocket. Subtracting that underwriting fee [$100 million] from the Goldman investment [$450 million], and you could easily make the case that for a net purchase price of $350 million, Goldman's ante only values Facebook at $39 billion. Hey, that's just off by $11 billion, so don't worry about it. Buy your shares where you can get them. In other words, go open a $10 million minimum private client account at Goldman Sachs. (Who says Goldman didn't learn its lesson about shafting its own customers? This time around, they've managed to get the customers to line up the shaft themselves.)
C'mon, you don't get to be America's great big bubble machine by expending energy trying to shaft clients. You gotta teach them to do it for themselves. Sorta like "give a man a fish," only, you know, with shafting. By Salmon's reasoning, even if Facebook stays private, Goldman could make out with an even handsomer reward with more private placement deals. "Right now, [Goldman's] in the highly enviable position of having the exclusive ability to parcel out Facebook shares to its own clients, and to make money on pretty much every trade in Facebook shares. That, surely, is more valuable than any one-off IPO fee." The greatest trick the devil ever played was convincing the world that Facebook was definitely worth $50 billion in January 2011? Is Lloyd Blankfein Keyser Söze?
Five reasons why I'm not buying Facebook [Fortune]
Goldman’s Investment Actually Values Facebook At Much Less Than $50 Billion [BI]
Why Facebook won’t go public [Reuters]
Related: Goldman Sachs Investment in Facebook Makes That $50 Billion Valuation Look More Legit
The Obama Administration loves the kids! And is putting some serious dough into making sure they’re as healthy as possible.
The Obama administration plans to announce Monday that it will make $206 million in bonus Medicaid payments to 15 states — with more than a fourth of the total going to Alabama — for signing up children who are eligible for public health insurance but had previously failed to enroll.
The payments, which were established when Congress and President Obama reauthorized the Children’s Health Insurance Program in 2009, are aimed at one of the most persistent frustrations in government health care: the inability to enroll an estimated 4.7 million children who would be eligible for subsidized coverage if their families could be found and alerted. Two of every three uninsured children are thought to meet the income criteria for government insurance programs.
Kathleen Sebelius, the secretary of health and human services, has called the matter “a moral obligation” and has challenged health care providers, state and local governments and community groups to seek out eligible children.
The stubbornness of the problem is one reason the government expects millions of people to remain uninsured even after 2014, when the new health care law requires most Americans to have coverage and vastly expands government programs to make it affordable.
The bonus grants are distributed according to a formula. To qualify, states must have adopted at least five of eight measures aimed at streamlining enrollment for children in public insurance programs and have recorded Medicaid caseload increases that could not be attributed solely to a worsening economy. Thirty-two states did not even apply for the grants. Three of the 18 that did apply did not qualify for payments.
Alabama will receive a $55 million bonus, more than twice as much as any other state, for having 133,000 more children on its Medicaid rolls than projected by a formulated base line, according to the Department of Health and Human Services. The 15 states that will receive bonuses reported a total of 874,347 children above the baseline, which factors in population growth and, to some degree, demand driven by the economy.
To make enrollment easier, Alabama has eliminated asset tests for children, ended requirements for an in-person interview and allowed children to remain eligible for a year without renewal. It also sends out renewal forms with blanks filled in when data is known, and allows applicants to verify their forms with an electronic signature. The state has adopted “express lane eligibility” so that Medicaid application processors can use income findings from other safety net programs to validate eligibility.
“We are absolutely ecstatic about the $55 million,” said Lee A. Rawlinson, Alabama’s deputy Medicaid commissioner. “It just could not have come at a better time for the state. And had we not had all these streamlining efforts we would never have been able to get to these applications and get all these children awarded.”
Oregon, which will receive a $15 million bonus, made many of the same refinements, while also extending coverage to more children. “Without these efforts to make enrollment simplified, the resources we put into outreach and marketing would be wasted,” said Cathy H. Kaufmann, administrator of Oregon Healthy Kids, which encompasses both Medicaid and the Children’s Health Insurance Program. “We’d have driven thousands of people to the front door but many of them wouldn’t be able to get in.”
Because of the formula’s requirements, none of the money will go to California, Texas or Florida, which account for nearly 40 percent of all uninsured children. Nor will any go to the four states that do the best job of signing up eligible children — Massachusetts, Vermont, Maine and Hawaii.
A study published in the journal Health Affairs estimated the national participation rate among children eligible for Medicaid and the Children’s Health Insurance Program at 82 percent in 2008. Thirteen states had rates below 80 percent, with Nevada at only 55 percent. Ms. Sebelius said in an interview that it would be “a huge win for kids” if the rate could be pushed to 90 percent.
A third of all children are now insured by two programs, compared with 10 percent of nonelderly adults, according to the Kaiser Family Foundation. Medicaid covers 24 million children, most of them living below the poverty line, and the Children’s Health Insurance Program, or CHIP, picks up nearly eight million in families with slightly higher incomes.
The programs’ costs are shared by the federal government and the states. Washington sets income-based eligibility thresholds, which states can exceed.
Let’s see what gripes the Republicans are gonna have with this one.
Source
free rental agreement forms
Susan Roberts Named New Eyewitness <b>News</b> Anchor | WPRI.com
CBS News correspondent Susan Roberts named new Eyewitness News anchor,
EXCLUSIVE: Camille Grammer's friend confirms 'RHOBH' exit <b>...</b>
about this blog. The FOX411 Blog is your first call for celebrity and entertainment news. FOX411 brings you the latest scoops using FOX's unmatched reach in news, entertainment, TV and the Internet. Click on back now, ya hear? ...
TCA: Discovery Networks <b>News</b> – Deadline.com
the Beth Melewski news was reported in December in Chicago press. will be interesting to see the Cash Cab in a different city. Comment by dylan — Thursday January 6, 2011 @ 3:10pm PST Reply to this post ...
No comments:
Post a Comment