Facebook raises $1.5bn
Palo Alto, CA, United States (AHN) – Social networking giant Facebook has announced it raised $1.5 billion at a valuation of approximately $50 billion.
The news confirms rumblings which have been surrounding the site and financial world for weeks.
Financial backers which are largely Goldman Sachs also confirmed that it will start submitting public monetary reviews by April 2012 a move that is likely fuled by and coincides with an IPO.
Regulatory guidelines dictate that when a business has more than 499 shareholders, they are needed to publicly disclose their monetary outcomes and file quarterly reviews towards the U.S. Securities and Exchange Commission. Facebook mentioned it expects to pass the 500 shareholder mark within the coming months.
However its most recent large transaction consisted of two parts.
Goldman Sachs completed an oversubscribed offering to its non-U.S. clients in a fund that invested $1 billion in Facebook Class A common stock.
In December, Digital Sky Technologies (DST), The Goldman Sachs Group, Inc., and funds managed by Goldman Sachs invested $500 million in Facebook Class A common stock at the same valuation.
“Our business continues to perform well, and we are pleased to be able to bolster our cash position with this new financing,” said David Ebersman, Facebook’s chief financial officer. “With this investment completed, we now have greater financial flexibility to explore whatever opportunities lie ahead.”
Earlier in the week Goldman Sachs moved to restrict future investors to non U.S. customers. A stance that caused “intense media attention,” however analysts say that by retaining American traders from the pool limits the scrutiny U.S. regulators can utilize towards the offer.
Facebook has since issued a statement saying, “DST and Goldman Sachs approached Facebook to express their curiosity in producing an investment, and Facebook made the decision it was an appealing chance to bolster its money reserves and improve its monetary versatility with restricted dilution to current shareholder.”
Under the transaction’s terms, Facebook had the option to accept between $375 million and $1.5 billion from the Goldman Sachs overseas offering, at the discretion of Facebook. While the offering was oversubscribed, Facebook made a business decision to limit the offering to $1 billion.
Even before the investment from Goldman Sachs Facebook expected to start filing public financial reports no later than April 30, 2012.
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