Facebook today announced that it has received $1 Billion from Goldman Sachs. Digital Sky Technologies and Goldman Sachs also recently made $500 million direct investment, resulting to an overall value of Facebook at $50 billion.
The world's No. 1 social network said that 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."
DST and Goldman Sachs approached Facebook to express their interest
in making an investment, and Facebook considerd the move as "an
attractive opportunity to bolster its cash reserves and increase its
financial flexibility with limited dilution to existing
shareholders."
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.
"There are no immediate plans for these funds. Facebook will continue
investing to build and expand its operations," Facebook said in a
statement.
United States securities regulations require companies with more than
499 shareholders to disclose financial information whether they are
publicly traded or not. Facebook expects to exceed that number some
time this year.
Facebook, founded in a Harvard dorm room in 2004, said it would begin
to file public financial reports no later than April 30, 2012, in a
statement detailing the new investment.
Facebook has more than 500 million users and is challenging big Web
businesses like Google and Yahoo for users' time online and for
advertising dollars.
Investors are increasingly eager to buy shares of Facebook and other
fast-growing Internet social networking companies on private
exchanges.