#652
Going Private in Public

Goldman Sachs has built itself a fast lane into the private companies its own bankers will later usher onto the public market, and if that arrangement sounds like a closed loop, that is precisely the shape of it. The firm has folded its alternatives unit into a newly minted "alternative investments platform," staffed with teams devoted to slotting wealthy clients directly into individual pre-IPO names alongside a secondary desk standing ready to trade those stakes once the urge to cash out arrives. Kristin Olson, who runs alternatives for wealth, frames the whole exercise as sparing clients the indignity of watching companies go "public at a trillion dollars" without them, the implication being that the serious money is made in the private dark, well before the household-name debut.

It makes for a tidy sequence, especially set beside last month's SpaceX float, where every bank in the syndicate rushed out a Buy the instant the quiet period lapsed, price targets fanning from Goldman's $205 to Raymond James's giddy $800, even as the shares drifted to six percent below their offer. Twenty-three years after Eliot Spitzer supposedly walled research off from banking, the stock sinks while the ratings climb, because nobody swimming in that particular water has to be told which way the current runs.

The IPO once was the destination; on the new private rails it is a waypoint, a liquidity event dressed up as a debut.