Original URL: http://www.theregister.co.uk/2011/01/04/facebook_goldman_sachs_clients/
Facebook sells equity: Reportedly valued same as Tesco
Wealthy insiders get early slice of boydroid pie
Posted in Financial News, 4th January 2011 11:37 GMT
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Cash-loaded Goldman Sachs clients with more than $2m to wave around were told over the weekend that they would soon have the opportunity to invest in Facebook.
According to a report in the New York Times [1], the brokerage plans to offer its clients up to $1.5bn in Facebook Inc equity.
Goldman Sachs said in an email to would-be investors on Sunday that they could splurge cash on a “private company that is considering a transaction to raise additional capital”.
But the unnamed firm was quickly identified as Facebook which – according to sources cited by the NYT – got tagged with a valuation of $50bn, after raising $450m from Goldman Sachs and $50m from a Russian investor.
Clients of the brokerage who do plan to invest in Mark Zuckerberg’s company have to cough up at least $2m, not sell their shares in Facebook until 2013, and steer clear of trading in secondary markets where the firm trades. That’s because they will be given juicy non-public information about the social network.
Investors interested in the opportunity will receive an email shortly with a “private placement memorandum”.
But such an investment doesn’t come without a certain amount of heat, given that Facebook is reportedly under scrutiny from US securities watchdog, the US Securities and Exchange Commission (SEC).
As noted by the Wall Street Journal [2] last week, a series of letters have been sent to an unknown number of people trading in the stock of Facebook and Twitter. It's understood that the SEC, whose investigation is at a preliminary stage, wants to know how such funds in what is a growing secondary marketplace are valuing shares of those privately-held internet companies.
If the reported valuation of Facebook at $50bn based on the new equity offerings is correct, it's worth noting that the cloudy Web-2.0 firm thus considers itself to be worth almost as much as dominant UK retail monster Tesco ($54bn), laden with real-world assets such as shops, trucks and stock. ®