Facebook Finally Acknowledges Goldman Sachs Deal, Says It's Done
Facebook issued a rare press release today to say it has raised $1 billion at a $50 billion valuation from Goldman Sachs’s overseas clients. It also acknowledged that Goldman and Digital Sky Technologies invested $500 million in December at the same valuation.
The news cycle about the deal spun out of Facebook’s control after leaks emerged around the new year, with the social networking company taking a beating for the tricky and elitist way it had raised funds in a seeming evasion of the public markets, and Goldman changing the rules of the deal after much interest and scrutiny.
Since then, the leaks have kept coming, with no official acknowledgement of the deal from Facebook, until now.
Facebook today shed light on some terms of the transaction: It had the option to accept between $375 million and $1.5 billion from Goldman Sachs, and elected to choose $1 billion in an offering that was completed today.
The company distanced itself from the deal, effectively saying that it didn’t need the money and it expected to cross 500 shareholders this year anyway (something All Things D was first to report).
DST and Goldman Sachs approached Facebook to express their interest in making an investment, and Facebook decided it was an attractive opportunity to bolster its cash reserves and increase its financial flexibility with limited dilution to existing shareholders….
Even before the investment from Goldman Sachs, Facebook had expected to pass 500 shareholders at some point in 2011, and therefore expects to start filing public financial reports no later than April 30, 2012.
Please see the disclosure about Facebook in my ethics statement.