Facebook raises $1.5 billion, now worth $50 billion

By on January 22, 2011, 10:26 AM
Facebook has announced that it has raised $1.5 billion at a valuation of approximately $50 billion, but it is has no immediate plans for the funds and will simply continue to build and expand its operations. The transaction consisted of two parts: on Friday, Goldman Sachs completed an oversubscribed offering to its non-US clients in a fund that invested $1 billion in Facebook Class A common stock, while last month, Digital Sky Technologies (DST), The Goldman Sachs Group, and funds managed by Goldman Sachs invested $500 million in Facebook Class A common stock at the same valuation.

Facebook said it was approached by DST and Goldman Sachs; the company only then decided that the proposed deal was an attractive opportunity to bolster its cash reserves and increase its financial flexibility with limited dilution to existing shareholders. Facebook had the option to accept between $375 million and $1.5 billion from the Goldman Sachs overseas offering, but the company chose to limit it to $1 billion. Facebook expects to pass 500 shareholders at some point this year, and therefore predicts it will start filing public financial reports no later than April 30, 2012.

"Our business continues to perform well, and we are pleased to be able to bolster our cash position with this new financing, David Ebersman, Facebook's chief financial officer, said in a statement. "With this investment completed, we now have greater financial flexibility to explore whatever opportunities lie ahead."

The news that Goldman Sachs was investing in Facebook spread like wildfire last month, but we chose to cover it only now because Facebook has confirmed the deal and because a second, bigger investment was made. The social network was valued at $50 billion on the SecondMarket two months ago, but now it's official.





User Comments: 22

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Benny26 Benny26, TechSpot Paladin, said:

$50,000,000,000.00

Now that's a big figure. It's no wonder people lose hope in the world, it's because of crazy stuff like this.

slh28 slh28, TechSpot Paladin, said:

I wish I invented Facebook. It was an awesomely simple idea if you think about it.

NickV said:

Wow so much money

Guest said:

Valued at 50 Billion but ultimately worth much less. I think you'll be seeing the principle shareholders more and more trying to turn this over-hyped-value into real greenbacks before the whole delusion crumbles away.

Guest said:

$50 bill of nothing.

Best scam ever!

Guest said:

Didn't we as Amercians help pay for Goldman Sachs to get out of Debt?

Guest said:

I have been wondering from the start how Facebook was going to make money.

--Get stupid investors to pony up--

Xclusiveitalian Xclusiveitalian said:

I guess you make a lot of money in the business of selling everyone's private information

flukeh said:

Ehh, you guys are all missing the point. The reason it is worth so much is because it has so many people visiting it more then once a day. Advertisinggggg.

Guest said:

tell me if u had click any of the advertisement in the Fb, i never did that. Wish the adv really boost the sales in someway if company think it worth.

EXCellR8 EXCellR8, The Conservative, said:

so sick of hearing about fb... dumbest internet fad before twitter.

63Jax said:

for what people, for what, how come the us government let such financial paradoxes to happen? actually that company produces nothing but wins big time, how da' **** is that possible? something needs to be done, otherwise...

Jurassic4096 said:

I've seen the video with Mark Zuckerberg at the Web 2.0 Summit and wished he acted more like the Mark Zuckerberg from The Social Network movi. I know the movie isn't supposed to be his carbon copy, but he was (actor that played him) MUCH cooler, and quick witted in the movie. On stage he's a blabbering *****. Rich and smart, but still an ***** in person. IMO of course.

Jurassic4096 said:

EXCellR8 said:

so sick of hearing about fb... dumbest internet fad before twitter.

Half a billion people is far from a fad. Remember rap music was supposed to be a fad. I've left Facebook twice, but something brings me back.

RaiDeR55 said:

As far as ads on FB I don't see any..AB Plus works great.. nice and clean..

Leeky Leeky said:

so sick of hearing about fb... dumbest internet fad before twitter.

+1

I detest it.

Guest said:

How this drivel can be worth even one penny is anyone's guess ???

Guest said:

I do not like Facebook and don't plan to ever be on it. Having said that I guess I'm in the minority, as it seems millions of people simply like to talk about themselfs and give up any and all information to everyone else. Facebook collects all information and sells it to the highest

bidder(s).

Guest said:

I love how it takes two weeks for your facebook to be fully deleted.

CamaroMullet said:

Companies have been making tons of cash from ad revenue for years. Why is this a big deal? Is it crazy that geico will probably spend several million dollars advertising on Superbowl Sunday? It's simple folks: visitors = cash. Whether or not people click on the ads, logos / products are seen, we get familiarized with them, so when we do feel like shopping we know what to get, where to get them, etc...

I personally don't like FB, BUT I keep one active. I have family all over the country, super easy to share pics with everyone. I don't post stupid stuff like when I'm going to go take a crap. But it does serve a purpose. What information does FB have on us that isn't already public info? If you choose to store your CC# or bank account info on the web that's your deal.

Guest said:

World Population; 6 Billion and counting.

People that have no life and spend 12 hours a day on FB? 500 Million.

IAMTHESTIG said:

This is what makes America great... capitalizing on peoples stupidity and boredom. I wish the whole myface thing (nomenclature used on purpose) would just die. Nearly as much, if not more time is wasted on these stupid social network sites as is wasted with World of Warcraft.

The owner should be proud to have an enterprise of such worth, while at the same time slowing down and distorting the progression of man-kind as a sentient and intelligent life form.

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