April 2, 2012
It’s been a rough couple of weeks for Wall Street giant Goldman Sachs. Still, it’s hard to imagine a more embarrassing public relations fiasco than being connected with child sex trafficking — even indirectly. But that’s exactly what happened over the weekend after New York Times columnist Nicholas Kristof revealed Goldman’s $30 million stake in Village Voice Media, which has come under fire for its Backpage.com website, which Kristof labels the “biggest forum for sex trafficking of under-age girls in the United States.”
Realizing that a connection to any company associated with the words “child,” “sex,” and “trafficking,” is probably the last thing Goldman needs, the bank struck a deal to sell its stake back to the media company on Friday. A Goldman spokesperson told Reuters that the bank lost the “vast majority” of its investment. But clearly, it was worth it for Goldman to sever ties. As Kristof wrote:
Goldman Sachs was mortified when I began inquiring last week about its stake in America’s leading Web site for prostitution ads. It began working frantically to unload its shares, and on Friday afternoon it called to say that it had just signed an agreement to sell its stake to management.
Goldman had originally paid $30 million for the stake in the Village Voice in 2000 through a private equity subsidiary, GS Capital Partners III. In 2006, after Village Voice Media merged with New Times, Goldman’s investment converted into a 16% stake in the company.
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!?!?!?!?!?!?! Sheer gall.