Today Facebook.com said in a press release, that they completed raising $1.5 Billion Dollars which makes the companies valuation $50 Billion.
Here is some information from the press release:
“The transaction consisted of two parts.”
“Today, Goldman Sachs completed an oversubscribed offering to its non-U.S. clients in a fund that invested $1 billion in Facebook Class A common stock.”
“In December, Digital Sky Technologies (DST), The Goldman Sachs Group, Inc., and funds managed by Goldman Sachs invested $500 million in Facebook Class A common stock at the same valuation.”
“Our business continues to perform well, and we are pleased to be able to bolster our cash position with this new financing,” said David Ebersman, Facebook’s chief financial officer. “With this investment completed, we now have greater financial flexibility to explore whatever opportunities lie ahead.”
“Under the transaction’s terms, Facebook had the option to accept between $375 million and $1.5 billion from the Goldman Sachs overseas offering, at the discretion of Facebook.”
“While the offering was oversubscribed, Facebook made a business decision to limit the offering to $1 billion.”
“Even before the investment from Goldman Sachs, Facebook had expected to pass 500 shareholders at some point in 2011, and therefore expects to start filing public financial reports no later than April 30, 2012.”
So the takeaways from this announcement is that Goldman was willing to invest another $500 Million but Facebook turned it down.
Facebook will probably go public by the end of April 2012 when it has to start releasing finanical data as it will be over the 500 shareholder limit
MHB,
Would you buy shares @ $50B valuation?
I had the chance to buy shares at $33 pre-split last year but I couldn’t find enough friends to put together the $2M cash block that was for sale.
To answer your question yes I think even at $50 Billion its a good buy
I will be $100 Billion by the time it comes to market
And of course there have already been smaller blocks of shares that have traded giving Facebook at $70 Billion dollar valuation
http://www.thedomains.com/2011/01/15/facebook-hits-70-billion-dollar-vaulation-just-2-weeks-after-hitting-50-billion/
Facebook is dying a slow death This fade is coming to an end
I have no doubt Facebook will have a ‘value’ attached to it north of $50 Billion, at some stage, Mike – a value, that is, reflected in what people are prepared to pay. And, of course that’s valid enough, as far as it goes.
But, in this case, I reckon ‘value’ will prove to be ‘fluid’.
…The p/e ratio looks like getting wholly out of whack already, imo. Danger signals. All the hallmarks of a bubble. Any higher, and investors will be getting very exposed. We’ve seen it all before. At some point, ‘value’ must come back to align with real ‘worth’ (ie p/e). At that point, there’ll be a price correction.
The key to making money from FB shares will be in the timing – ie to get in – and out – before the stock implodes…..either because the market loses confidence in an inflated p/e ration – or, the market sniffs another train to jump on that threatens FB (like FB threatened MySpace).
Either way, there’s risk here above about a $30 Billion ‘value’, imo.
and soon FB will hire Eric Schmidt …
oversubscribed by non us investors that is the key wording there is liquidity in the world outside of the us…asia, arab countries etc.50 billion is overvalued there is a bubble here
and it will burst.fb is a monentum play which catches wall street eyes. the same eyes that could not correctly model aaa rated mbs.
“Facebook will probably go public by the end of April 2012”
at which time the OVER valuation will be at it’s all time high and EVERYONE will be in which means time to sell.
The public can be fickle. Look what happened to geocities way back in 2000. Billion dollar valuation turned to junk. Then there was AOL… same thing. Then there was My Space. Same thing.
But this time it’s different?
Some company with do the facebook thing but on mobile phones based on their location and everyone will run from facebook.
Think Groupon (deals) with iphone ease of use (comfort) with ultimate micro payment solution (digital wallet) and location based social networking (friends and stuff I like near me) that shows where you are in relation to your friends in real time as in… as you walk or drive… REAL time.
Add voice recognition to that and you have the next Billion dollar company.
That puts facebook out of business and I’m sure it’s out there somewhere being built right now by the next college drop out 🙂
@ Rob Sequin
that shows where you are in relation to your friends in real time as in… as you walk or drive… REAL time.
———————————————-
Nice post … BUT
that part above “that shows where you are..REAL time.
would be the ultimate Big Brother DREAM COME TRUE …
um, what?
forget it! my wife just said she like’s your idea 🙂
FB must make more profits before launch an IPO
Dot
Who says they aren’t making profits?
“Who says they aren’t making profits?”
If they’re going to value the company at 50 Billion should’nt the question really be – who said they are making profits ?
We’ve seen Goldman Sach’s style “valuations” before, selling empty boxes wide & far disguised and packaged up as “investments” …pop!
Did’nt Goldman Sachs just get done by the Securities and Exchange Commission who filed charges of fraud for selling subprime mortgages that were secretly designed to lose value?
washingtonpost.com/wp-dyn/content/article/2011/01/19/AR2011011906901_2.html?sid=ST2011012102494
In fact is’nt the money that they have invested in Facebook bail out money from the tax payers/fed ?
…I guess technically speaking you could say you already own shares in Facebook.
Wallstreet…hmmm 😉 you should hear what Max Keiser has to say about the way Goldman Sachs does business ….Google it ….EEEEK
Gazzip
1st of all although Facebook doesn’t to make there numbers known publicly doesn’t mean they didn’t make there numbers known to their current investors or potential investors
2nd every investor has to make their own decisions, I wouldn’t invest in something just because because Goldman invested in it, nor would I shy away from it because goldman invested in it.
Goldman is just one of the 500 or so investors Facebook has
what, FB wants to do (or buy) with all these money??? (+ its annual profits)
maybe … buy Twitter??? 🙂 (now, its value should be around $1 billion)