Facebook Up $1.5B In New Financing
January 23rd, 2011 | by Jen |Facebook has raised $US1.5 billion in new financing led by Goldman Sachs, it announced on Friday.
Investments include $US500 million from Goldman Sachs and the Russian investment firm Digital Sky Technologies, as well as $US1 billion from wealthy Goldman clients based overseas.
$US50 billion - more than the market values of Yahoo! and eBay. According to SharesPost, a private marketplace, the private shares of Facebook are trading at an implied value of $US76 billion.
Facebook said in a statement that while it had the opportunity to accept as much as $US1.5 billion from Goldman’s foreign clients - after US individuals were shut out of the offering - it chose to limit the amount.
”While the offering was oversubscribed, Facebook made a business decision to limit the offering to $US1 billion,” the company said.
Facebook did not elaborate.
The decision to take only $US1 billion was not connected to Goldman’s decision earlier in the week to prevent US clients from taking part in the Facebook investment, a person briefed on the matter said.
The move by Goldman to withdraw the offering from its US clients came after the plan had drawn regulatory scrutiny.
The Securities and Exchange Commission had started to look at the structure of the offering and at whether news coverage of it crossed a boundary against the ”general solicitation and advertising” in private offerings.
Facebook also confirmed on Friday that it expected to have more than 500 shareholders sometime this year, exceeding a limit set by securities laws, and planned to begin filing public financial reports by April 30 next year.
Facebook said in its statement that it had expected to pass that threshold even without the Goldman investment.
With its war chest now $US1.5 billion bigger, what does Facebook plan to do with the new money? Nothing, for now. The company said that it would continue to invest in its businesses.
Facebook’s chief financial officer, David Ebersman, said: ”Our business continues to perform well, and we are pleased to be able to bolster our cash position with this new financing. With this investment completed, we now have greater financial flexibility to explore whatever opportunities lie ahead.”