Facebook valued at $50bn after latest investment
The cash injection of $500 million from Goldman Sachs and Digital Sky Technologies into the site, which began in a Harvard dorm in 2004, is once again fuelling rumours that the company is about to go public.
Facebook’s founder, Mark Zuckerberg, named Time magazine’s person of the year 2010, stands to become one of the richest people on the planet in the new valuation of the company.
Zuckerberg owns about 25% of Facebook, and it is thought that a sale at the new price would double his estimated $6.9bn fortune. The 26-year-old is already one of the world’s youngest billionaires.
His role within Facebook is not without controversy and was the subject of a hit Hollywood movie last year, The Social Network.
Zuckerberg has always brushed off rumours he is preparing to sell shares in the firm, telling a conference last year “don’t hold your breath”.
Indeed Facebook, which has more than half a billion users worldwide, has resisted selling shares, given the public scrutiny which comes with such a move.
US law, however, requires companies with more than $10m in assets and 499 shareholders to register as public companies.
It is believed Goldman Sachs will try and get around this by setting up a special purpose vehicle (SPV) to allow its rich clients to invest in the firm.
The SPV would be managed by Goldman and considered one investor, even though it could conceivably be pooling investments from thousands of clients.
The deal with Goldman — the first Wall Street bank to invest in the website — follows a strong 12 months for the company, which has some 500 million users and, according to analysts’ estimates, generated about $2bn in revenues.
The US Securities and Exchange Commission is reportedly looking into the booming trade in privately held shares of popular social networking sites because companies with 500 shareholders must disclose certain financial information.
Facebook was the most visited website and the most searched term in the US in 2010 — accounting for 2.11% all of all searches.
Last month the company announced 100 new jobs at its operations in Dublin, which currently employs 200.
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