Now that Facebook has filed for its IPO and all the numbers are out (and pictures!), the big question is: how much is the social networking giant actually worth? I’ll tell you right off the bat: I don’t know, and nobody else does either.
The general public won’t know what the company’s valuation is until right before the offering is made, which typically occurs about three months after the company files for its IPO. At least one rumor claims May 2012 is the timeframe to look forward to, but of course we’ve also heard Q1 2012, Q2 2012, or even later, but maybe sooner after all.
It is worth taking a look at how the social networking’s valuation has progressed over the years. Facebook’s valuation has been argued to be at $100 billion back in May 2011, and the number has been repeated rather senselessly ever since. Unsurprisingly though, nobody has invested in Facebook at a $100 billion valuation. Let’s take a look at the billions of dollars that Facebook has been valued at, shall we?
Unknown valuation: In June 2004, PayPal co-founder Peter Thiel gave Facebook a $500,000 loan, later converted to a 10 percent stake and eventually reduced to 3 percent.
Unknown valuation: In October 2004, Maurice Werdegar of Western Technology Investment (WTI) provided Facebook with a $300,000 three-year credit line. He followed this up with a second $300,000 credit line and a $25,000 equity investment in February 2005.
$100 million valuation: In April 2005, Accel Partners invested $12.7 million in Facebook for a 15 percent stake.
$500 million valuation: In April 2006, Greylock Partners invested $27.5 million in Facebook for a 1.5 percent stake.
$15 billion valuation: In October 2007, Microsoft bought a 1.6 percent stake in Facebook for about $240 million.
$15 billion valuation: In November 2007, Chinese business magnate Li Ka-Shing invested $60 million in Facebook, followed by another $60 million for a total stake of 0.8 percent.
Unknown valuation: In January 2008, European Founders Fund invested $15 million in Facebook.
$10 billion valuation: In May 2009, Digital Sky Technologies invested $200 million in Facebook for a 2 percent stake.
$23 billion valuation: In June 2010, Elevation Partners bought $120 million in shares on the secondary market for a 1.5 percent stake.
$50 billion valuation: In December 2010, Facebook announced it had raised $1.5 billion. The transaction consisted of two parts. In December 2010, Digital Sky Technologies, The Goldman Sachs Group, and funds managed by Goldman Sachs, invested $500 million in Facebook Class A common stock for a 1 percent stake. In January 2011, Goldman Sachs completed an oversubscribed offering to its non-US clients in a fund that invested $1 billion in Facebook Class A common stock.
$52 billion valuation: In February 2011, Kleiner Perkins Caufield & Byers (KPCB) invested $38 million in Facebook for a stake of less than 1 percent.
$65 billion valuation: In March 2011, investment firm General Atlantic purchased roughly 2.5 million Facebook shares from former Facebook employees for a 0.1 percent stake.
Unknown valuation: In March 2011, investment firm T. Rowe Price invested $190.5 million through various funds for a stake of less than 1 percent.
$70 billion valuation: In June 2011, Facebook investment fund GSV Capital bought 225,000 Facebook shares.
$65.50 billion valuation: In August 2011, advertising company Interpublic Group sold approximately half of its holdings for net cash proceeds of $133 million in a privately negotiated transaction.
For a while now, employees and early stakeholders have been selling shares privately on SecondMarket and SharesPost. Most of these have been in the valuation range of $80 billion, although there have also been auction failures. The second market is different, but nevertheless, what follows is the most recent Facebook valuation.
$83.5 billion valuation: In January 2012 the latest SharesPost auction begins (it ends tomorrow) at a share price of $35.50. This number will of course change: private shares can still be traded on secondary markets after the filing, though Facebook will restrict transactions as the date of the public offering nears.
So to summarize, while Facebook’s current valuation is unknown, the company’s financial worth has certainly grown over the years, and everyone is looking to see if it will pass the rumored $100 billion mark. That’s just a nice round number though: the real valuation is unlikely to have the perfect 12 digits, but of course everyone wants to know how close it will be to it. In short, the only official number we have is $50 billion. Investments have been made valuing the company around the $70 billion mark while sales on secondary markets have priced it in the $80 billion range. The expected valuation is anywhere between $75 billion to $100 billion, and there’s lots of time for even that to change.
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