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Tuesday, January 4, 2011

Facebook's $500m Goldman Sachs deal makes Mark Zuckerberg worth $14bn

Facebook has raised $500million in a deal that values the company at $50billion, making 26-year-old founder Mark Zuckerberg worth almost $14billion.

If you're worth $14billion at 26, how much will you be worth at 50? Wow!!!

Goldman Sachs invested $450million and Russian investment firm Digital Sky Technologies invested $50million, the New York Times reported, citing people involved that it did not name.

The new cash will let Facebook lure and retain employees, develop more products and possibly pursue acquisitions without being publicly traded.

The $50billion valuation would make Facebook worth more than Yahoo!, eBay and Time Warner.
Zuckerberg, who owns about a quarter of Facebook's shares, is one of the world's youngest billionaires and now one of the wealthiest of any age.

The newspaper said the deal may double Zuckerberg's personal fortune, which Forbes estimated at $6.9billion when Facebook was valued at $23billion.
Previously number 212 on Forbes' list of the world's billionaires, $13.5billion would catapult him into the top 40.
Representatives for Facebook, Goldman and Digital Sky Technologies declined to comment.
Goldman has the right to sell part of its stake, up to $75million, to the Russian firm.
The U.S. Securities and Exchange Commission is reportedly looking into the booming trade in privately held shares of popular social networking sites.

Growth: The $500m injection will enable Facebook to stay private while providing it with cash to make purchases, recruit top-level employees and develop new products.
A big reason the SEC may be curious about the trading of these popular private startups' shares is because once a company hits 500 shareholders, it must disclose certain financial information to the public, even if it hasn't filed for an initial public offering.

The Times reported that Goldman is planning to create a 'special purpose vehicle' that may be able to circumvent the 500 shareholder rule because it would be managed by Goldman and considered just one investor, even though it could conceivably be pooling investments from thousands of clients.
Shares of privately held companies can be traded on private stock exchanges such as SecondMarket, based in New York, and SharesPost, based in San Bruno, California.

The shares are generally sold by former employees or early investors in these companies.
Only institutional investors or high net-worth individuals – those worth more than $1million – can buy the shares.
But for those who can sell them, the market is on fire.

On SharesPost, a completed contract between a buyer and a seller valued shares of Palo Alto, California-based Facebook at $25 each.
This implies a valuation of nearly $57billion for the world's largest social network, with 500million-plus users worldwide.

Source: Daily Mail UK

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