Facebook Raises $1 Billion

By Cindy Waxer January 24, 2011

Facebook has raised $1 billion from investors in a financing round led by Goldman Sachs Group Inc. The Wall Street Journal reports that the cash came from a private offering to Goldman’s non-U.S. clients, and that the total funding round includes $500 million from Goldman and Russian investment firm Digital Sky Technologies.

Although Goldman Sachs values the social networking giant at $50 billion, a report by financial research firm Trefis puts Facebook’s worth at $45 billion but maintains that key drivers such as an increase in ad revenues, page views and market share could lead to an even higher valuation of $100-plus billion for Facebook.

Earlier this year, DealBook revealed that Goldman clients received an unusual request in their inbox – an invitation to invest in Facebook, which industry observers say is likely to stage an initial public offering in 2012. According to DealBook, clients would have to invest a minimum of $2 million and would be prohibited from selling their shares until 2013.

However, in late January, intense media attention forced Goldman to close off the private placement offer to U.S. clients for fear of violating U.S. securities laws. As reported by TechZone360.com, Goldman Sachs had come up with an investment vehicle that would have allowed basically any of its wealthy clients to invest in Facebook. But the scheme was widely reported in the media after it was e-mailed to clients. Now, the only investors who can take part in the Facebook investment plan have to live outside of the United States – where U.S. government rules do not apply.

The emerging situation was called “a huge embarrassment” for the banking firm, by Business Insider, with the New York Times calling it a “serious embarrassment.”

Goldman Sachs ranked as the top global mergers and acquisitions advisor last year, ousting competitor Morgan Stanley from its stronghold, according to Thomson Reuters data released this week. Goldman advised on 370 deals worth $554.5 billion in 2010, compared with Morgan Stanley's 394 deals worth $538.1 billion.




Edited by Tammy Wolf

TechZone360 Contributing Editor

SHARE THIS ARTICLE
Related Articles

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More

Putting the Flow into Workflow, Paessler and Briefery Help Businesses Operate Better

By: Cynthia S. Artin    9/14/2018

The digital transformation of business is generating a lot of value, through more automation, more intelligence, and ultimately more efficiency.

Read More

From Mainframe to Open Frameworks, Linux Foundation Fuels Up with Rocket Software

By: Special Guest    9/6/2018

Last week, at the Open Source Summit, hosted by The Linux Foundation, the Open Mainframe Project gave birth to Zowe, introduced a new open source soft…

Read More

Unified Office Takes a Trip to the Dentist Office

By: Cynthia S. Artin    9/6/2018

Not many of us love going to see the dentist, and one company working across unified voice, productivity and even IoT systems is out to make the exper…

Read More

AIOps Outfit Moogsoft Launches Observe

By: Paula Bernier    8/30/2018

Moogsoft Observe advances the capabilities of AIOps to help IT teams better manage their services and applications in the face of a massive proliferat…

Read More