NEW YORK—Leading online social networking website Facebook Inc. has
received a $500 million investment from investment bank Goldman Sachs
Group Inc. and a Russian investor.
The capital infusion assumes a valuation of $50 billion for Facebook,
the social networking site with 500 million users worldwide, which last
month became the most-visited website in the United States.
Goldman, the New York-based bank, invested $450 million, while
Russia’s Digital Sky Technologies contributed $50 million in cash,
according to a report by the New York Times' Dealbook.
With $50 billion in assumed valuation, Facebook—only six years in
existence—now surpasses other Internet giants such as eBay Inc. and
Yahoo Inc. The deal also gives the company increased capital to grow its
business, launch marketing and advertising platforms, and hire
employees away from rivals such as Yahoo and Google. Inc.While public pressure has increased on Facebook for an initial public
offering (IPO) of stock, CEO Mark Zuckerberg indicated last year that it
may not happen until 2012.
The investment comes on the heels of recent scrutiny by the Securities
and Exchange Commission (SEC) on the private market for shares of
non-publicly listed companies such as Facebook, Twitter, and LinkedIn.
Experts say that the investment may grant Goldman the inside track on
becoming the lead underwriter for Facebook’s IPO in the future, which
could generate hundreds of millions in proceeds for the bank.
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