Goldman's Wirefly Buzz
08/29/06 - 03:19 PM EDT
Matthew Goldstein
Goldman Sachs (GS Quote - Cramer on GS - Stock Picks) has fallen in love this summer with InPhonic(INPC Quote - Cramer on INPC - Stock Picks), the money-losing operator of the Wirefly online handset-sales site.
It's not clear whether Goldman views InPhonic as a possible M&A play or simply as a bet on the surging wireless market. But a recent buying spree means the investment firm now ranks as InPhonic's second-largest shareholder. Goldman now owns a 14% equity stake in the Washington, D.C.-based company. Goldman Sachs acquired most of those 5 million shares over the past three months, when shares of InPhonic traded around $6.50. The stock was up 20 cents Tuesday at $6.69. Goldman finds itself second on the InPhonic shareholder list behind Technology Crossover Management. That Silicon Valley venture capital firm owns a 15% equity stake and was an early investor in InPhonic, which went public in November 2004. Goldman Sachs offers little insight for its sudden affection for InPhonic, which also sells service contracts for all the major wireless telephone networks, including Cingular, Verizon Wireless and Sprint(S Quote - Cramer on S - Stock Picks). The Wall Street firm says in a filing that shares "were acquired for investment purposes." A Goldman Sachs spokesman didn't return a telephone call. But the firm's emergence as a major shareholder in InPhonic is sparking speculation about whether the Wall Street firm might see the company as an undervalued gem or possible takeover candidate.
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