Warning: Oversharing Ahead, as Wall Street Bankers Start to Talk Up Web 2.0 IPOs
Here’s the tastiest part of an article in the New York Times yesterday about how Goldman Sachs essentially borked a deal to offer its rich clients in the U.S. private Facebook shares:
“However, over the last two weeks, the companies’ [Goldman and Facebook] relationship has grown increasingly tense, people involved in the offering said. Accusations about the news leak have flown back and forth, these people said.”
You can say that again, but –as leaky as the social networking giant has been over these many years in Silicon Valley–it seemed obvious that most of the intricate financial details about the offering were hand-delivered right from some of Wall Street’s hired guns to the DealBook scribes at the Times.
(Memo to myself: Start kissing up to those bankers, however appalling!)
Unfortunately for Facebook, it was those massive news leaks that drew the attention of government regulators to the deal. And with worries that it veered too close to the edge of violating securities regulations, the U.S. part of the offering had to be pulled.
Despite this particular mess, this kind of mishegas is only going to increase now that the banker bloviating is getting fired up a notch in 2011, as a spate of Web 2.0 Internet companies moves to public offerings.
Along with Facebook, that includes Zynga, LinkedIn and Groupon, as well as several others, all of which are just starting the banker bake-offs that used to be common in the Web space.
And that’s going to mean plenty of information to be found as some of those bankers inevitably drop a dime on the companies they are hired by.
Translated into more modern social terminology that these companies better understand: Bankers are really good at oversharing.
How do I know this? Because that is exactly what happened when the Web 1.0 bubble was in full froth.
Like Christmas in July, as bankers arrived to compete to win IPOs, the information flow suddenly became huge for reporters like me–I was at The Wall Street Journal at the time–covering it all.
It looks like more of the same for this round of stock sales likely to come. Already we know more about Facebook’s financials than we ever did.
And to that, I say: Loose lips may sink ships, but it will make for an awesome amount of news to come in 2011 about the Internet’s starring players.