Back when Berkshire Hathaway only had Class-A shares worth thousands of dollars, there were a few investment firms at work on similar vehicles to allow ordinary investors to buy fractions of a share at smaller prices. Berkshire responded by issuing their own fractions, at 1/30th of a Class-A share (since split to 1/1500th), because they wanted investors, not investment firms, owning the shares.
It's interesting that now Facebook is doing a sort of converse of Berkshire's actions; that the pain of a public company is so onerous that having a bank involved is apparently seen as an advantage.
Alternatively, FB may just want to keep financials a secret because they are worth a lot more when people are wildly speculating than they would be if they had to be as open as a public company.
(Goldman probably got a look under the hood, but I doubt they will pass that along to the investors they hope to sell Facebook investments to, so both FB and Goldman will benefit from uninformed speculation.)
Any prospectus put together by Goldman will have significant disclosure and results of their internal audits. Despite the hoopla, this is a pretty regulated area of commerce.
As to who will read such a prospectus, that's likely a different beast altogether.
It's my belief that FB is more likely to be in a pre-IPO Google situation right now, that is, that they're sitting on more than people realize, not less. I recall Google routinely requiring academics to cut the server and request numbers by a factor of 10-100x when giving talks about what was going on, pre-IPO. A luxury I'm sure they would appreciate still having.
that the pain of a public company is so onerous that having a bank involved is apparently seen as an advantage
Let's be specific about this "pain". What I recall from various articles, Facebook is very reticent to have it's actual revenue numbers floating around.
One might argue that there is too much regulation of public companies in general but the specific regulation that a public company has to engage in public disclosure seems sound to me. Facebook's skirting of this regulation seems questionable to say the least.
They're not a public company, or even effectively a public company, even with Goldman facilitating, if you still need to be a RegD accredited investor to buy a share.
If you read the Berkshire annual reports from back then, I think Buffet would have strongly preferred to do what FB is doing now, if he could have, or the vehicles existed.
He knew his mom-and-pop investors needed liquidity, and wasn't able to buy them all out himself, so he went for the market option. But, he was clearly ambivalent about it. I believe his first instructions to his floor trader were that he hoped there would be no transactions in the first year of listing.
At the time, Berkshire was already public. Buffett maintained the high share price because he wanted his owners to be serious about owning the stock, the test of seriousness being the high cost of ownership. When investment firms threatened to remove this barrier, Buffett went ahead and preempted them.
Buffet definitely was already in control of the company when he decided to list on the NYSE, in fact, recall that he bought the company largely out of pique at getting 'chiseled' on price by the existing management team during a private purchase of shares..
The only reason he listed was to get his current shareholders some liquidity; he's quite clear about this in his annual letters from the time. He had no need for or interest in the liquidity himself, and was, I would say judging from his actions over the next 20 years, pretty happy with his then-current disclosure situation. He did pretty much everything he could to keep Berkshire out of the drive for quarterly investment earnings game for public companies, and worked hard to reduce any requirements for reporting on what was going on at Berkshire.
Also, agreed, that high share prices helped him make a point that he spent many decades beating the drum on: value over price.
It's interesting that now Facebook is doing a sort of converse of Berkshire's actions; that the pain of a public company is so onerous that having a bank involved is apparently seen as an advantage.