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Court papers have told the world what it already knows: Facebook is not worth $15bn.

That was the value Microsoft slapped on the social networking poster child last October when it forked over $240m for a 1.6 per cent stake in the company. But according to papers from the recently settled court case between Facebook and Harvard University dating site ConnectU, Facebook believes its common stock is worth only $3.75bn.

According to case documents, ConnectU argued the deal was bogus in part because Facebook lied about its valuation when the Microsoft pact went through.

"The term sheet and settlement agreement is also unenforceable because it was procured by Facebook's fraud," the court papers say. "Indeed, based on a formal valuation resolution approved by Facebook's board of directors but concealed from ConnectU, the stock portion of the purported agreement is worth only one-quarter of its apparent value based on Facebook's public press releases."

In other words, ConnectU somehow nabbed Facebook's internal valuation of the company's common stock, and this figure was $3.75bn, not $15bn.

But as The New York Times points out, Microsoft bought preferred stock in Facebook. Preferred shares carry added shareholder rights, and that means they're worth more. So Microsoft has the figure too high. And ConnectU has it too low.

Or maybe they both have it too high. After all, no one really knows what a Facebook IPO would bring. But one thing's for sure: a 1.6 per stake isn't worth $240m. Even if you believe in social networking. Some described the Microsoft-Facebook tie-up using the word onanistic.

In any event, Judge James Ware has ordered ConnectU to honor its February Facebook settlement. ®

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