Goldman Sachs' $450MM investment in Facebook says that big money would like to see another tech bubble. With a $50B market valuation, Facebook may have to work for quite awhile to approach any kind of "fair" valuation. But no matter. The economics here are simple: GS puts in some chump change today, and in a year or less, flips that investment to the starry-eyed for a double or better, plus cleans up on the fees for the IPO. And, if it works, the floodgates are open for a number of smaller follow-on deals. There are a number of promising candidates for "valuation insanity" in the social media and web 2.0 arenas.
Timing of this is fairly urgent. What other candidate schemes are there that could create this kind of money fountain? Not too many. Strong tech stocks like SalesForce.com already are showing signs of being a bit "bubbly" --> http://qr.ae/tIei so the time to move is NOW. Watch for more announcements like this soon, and for plenty of hoo-hah about coming "blockbuster IPOs".
Talk about history compression. Have people already forgotten the last tech bubble and bust? Not even ten years have passed since all manner of tech story companies were rushed to the public market, enriching the early investors and decimating the portfolios of many enthusiastic IPO buyers. The NASDAQ stock market has had quite a run since March 2009. Many may be tempted to think that it's safe to go back in the water. And the big-money players will be working overtime seducing you. Just sayin'.
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