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Lundi, 03 Janvier 2011 17:23

Goldman Infusion Values Facebook at $50 Billion, Virtually Assures IPO

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Goldman Sachs, the platinum-plated, publicly bailed-out Wall Street giant, has invested $450 million in Facebook, the massive social networking website. The new money heightens the likelihood that Facebook will go public, probably in 2012, in an offering now almost surely to be underwritten by Goldman Sachs itself. Happy New Year!

In fact, as

Reuters observed, part of the logic of this investment may simply have been Goldman buying the right to take Facebook public. Goldman Sachs has also set up a special purpose vehicle to allow its high-net-worth clients to invest in the booming website, which has over 550 million users.

The investment values Facebook, founded by 26-year-old Harvard dropout Mark Zuckerberg just six short years ago, at an astonishing $50 billion. Zuckerberg himself is now worth about $15 billion — on paper at least — cementing his elite status as one of the richest men in the world.

It’s a predictably savvy investment by Goldman, long considered the premier Wall Street investment bank, which has now assumed the role of Facebook’s banker.

Facebook is under pressure to go public — not only by its own investors, who are looking for a handsome exit — but also the federal government, which has launched a probe into the private markets that have emerged allowing the wealthy to buy and sell shares of the not-yet-public company and other startups.

A spokesperson for Facebook, one of the largest websites in the world, declined to comment on the new money. Goldman Sachs did not immediately respond to a request for comment.

Zuckerberg has publicly been cool to the notion of an IPO, but he knows as well as anyone else that the offering is now virtually inevitable.

Goldman’s huge Facebook investment comes at a time of increasing froth in the high-tech startup market. Micro-blogging phenom Twitter is now worth $3.7 billion — despite having basically no revenue.

One way to put all of these astronomical numbers in perspective is this. Zuckerberg, who was named Time’s Person of the Year for 2010, is now personally worth more than five times the value of AOL, my previous employer. Facebook itself is worth 20 times the value of the erstwhile internet leader.

Russian investment firm Digital Sky, a previous Facebook investor, has thrown in another $50 million, bringing the total valuation of the new infusion to $500 million. Digital Sky has already invested in a cool half-billion dollars in Facebook.

The rise of the social networking juggernaut has been impressive, to say the least. Despite having expected revenue of $2 billion in 2011 — or about one-tenth of Google’s expected cash-haul for the year — Facebook is now legitimately mentioned in the same breath as the web search pioneer.

The news was released in a carefully orchestrated leak from Facebook and Goldman Sachs to New York Times blog Dealbook — Goldman CEO Lloyd Blankfein’s favorite publication.

Follow us for disruptive tech news: Sam Gustin and Epicenter on Twitter.

Authors: Sam Gustin

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