New investment values Facebook at $65 billion

New investment values Facebook at $65 billion

Summary: A new investment would suggest Facebook has jumped from a valuation of $50 billion two months ago to $65 billion today.

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Investment firm General Atlantic is buying 0.1 percent of Facebook, giving the social network a valuation of $65 billion. The company is purchasing roughly 2.5 million Facebook shares from former Facebook employees, according to CNBC.

The deal has not yet closed as it still requires approval from Facebook. Unsurprisingly, neither General Atlantic nor Facebook are willing to comment. I'm wondering if today's rumor that a Facebook co-founder wants to sell 10 million shares is related.

Less than two months ago, Facebook announced that it had raised $1.5 billion at a valuation of approximately $50 billion, but that it had no immediate plans for the funds and would simply continue to build and expand its operations. The transaction consisted of two parts: 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, while 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 at the same valuation.

Comparing this $50 billion number to the new reported $65 billion suggests that Facebook is seeing a 30 percent boost in value since January. That's a huge increase in so little time, assuming this deal does indeed go through.

Last month, Kleiner Perkins Caufield & Byers (KPCB) invested $38 million in Facebook as part of its $750 million digital growth fund. The investment was only worth 0.00073 percent of the social network, but it was still done at a slightly larger valuation of $52 billion.

Recent rumors have suggested that Facebook was hoping to sell a stake at a $60 billion valuation. Clearly, the price went up, yet again.

Topics: Social Enterprise, Banking

Emil Protalinski

About Emil Protalinski

Emil is a freelance journalist writing for CNET and ZDNet. Over the years,
he has covered the tech industry for multiple publications, including Ars
Technica, Neowin, and TechSpot.

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13 comments
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  • RE: New investment values Facebook at $65 billion

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  • RE: New investment values Facebook at $65 billion

    New investors are flushing more good money after bad. Facebook has about the same value as your average newspaper. The only people that claim pouring boatloads of money into advertising is actually worth anything are the ones selling the advertising. The world is fully saturated with advertising.
    7mgte
  • Virtual money is not real money

    Facebook is only worth $65B in Facebook virtual money. In real life it is most likely barely breaking even.

    I can't understand how anybody can seriously believe the ridiculous numbers being thrown around by scammers.
    wackoae
  • RE: New investment values Facebook at $65 billion

    It's like the emperor's new clothes <img border="0" src="http://www.cnet.com/i/mb/emoticons/wink.gif" alt="wink"><br><br>What is Facebook going to be worth when IE9 and the other browsers allow you to avoid all advertising?
    tonymcs@...
    • What advertisement?

      @tonymcs@... I being using AdBlock and NoScript on Firefox since day one.

      I don't see advertisements anywhere.
      wackoae
      • RE: New investment values Facebook at $65 billion

        @wackoae

        I think that was my point ;-)
        tonymcs@...
  • RE: New investment values Facebook at $65 billion

    For anything like this valuation to hold two things have to happen.

    1) The rest of the software world fails to come forward with products which will eat away at Facebooks marked
    2) The regulator in all countries fails to curb Facebook's use of peoples private data

    Whilst it may take a while the regulators will eventually have no option but to limit what Facebook is allowed to do with private data. In many countries Facebook already breaches privacy regulations but gets round in on the basis that people have voluntarily provided their own information (some regulators seems to gloss over the fact that most users also post information which relates to other people as well as themselves) or that Facebook's computers are based in another country.

    Still Goldmans will continue to sell the idea this company is worth a fortune. Its a good job they had not been caught out falsifying valuations in the past.

    Oh they were caught. I must have forgotten.
    martin23
  • RE: New investment values Facebook at $65 billion

    Would you buy shares in FB at that value ?

    You might as well set fire to your cash, at least it will keep you warm for a short while.
    Alan Smithie
  • It's so nice...

    To see other people with common sense on this board. I've been saying for awhile these valuations are insane and will lead to the next bubble.

    Get ready for the next round of investors losing all their made up money.
    crazydanr@...
  • RE: New investment values Facebook at $65 billion

    Bubble alert! Bubble alert!
    hoaxoner
  • RE: New investment values Facebook at $65 billion

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