Facebook yesterday announced that Russian Internet investment outfit Digital Sky Technologies has made a $200 million investment in the social networking site in exchange for a 1.96 per cent stake.
This means Facebook is valued at just over $10 billion (£6.41 billion), which is 50 per cent lower than it Facebook’s valuation when Microsoft invested in the social networking behemoth in 2007. Admittedly, market conditions were much better at that time, but even then many felt the valuation was lofty.
DST will not have a seat on the board in return for its investment, but the $200 million worth of shares it acquired are preferred, just like Microsoft’s.
The Russian investment outfit is also planning to buy another $100 million of common stock from existing employees and common stock holders. These shares are understood to have a different valuation to the preferred shares it has just purchased, as they are part of a different transaction – it’s unclear on the valuation of these at this time, but it’s understood to be a lower price.
“This investment demonstrates Facebook’s ongoing success at creating a global network for people to share and connect,” said Facebook CEO Mark Zuckerberg in a statement.
“We’ve worked hard to bring more than 200 million people – 70 per cent outside of the US – onto Facebook to share with friends, family and co-workers. A number of firms approached us, but DST stood out because of the global perspective they bring – backed up by the impressive growth and financial achievements of their Internet investments. We’re looking forward to working with the DST team,” he added.
Discuss in the forums.
This means Facebook is valued at just over $10 billion (£6.41 billion), which is 50 per cent lower than it Facebook’s valuation when Microsoft invested in the social networking behemoth in 2007. Admittedly, market conditions were much better at that time, but even then many felt the valuation was lofty.
DST will not have a seat on the board in return for its investment, but the $200 million worth of shares it acquired are preferred, just like Microsoft’s.
The Russian investment outfit is also planning to buy another $100 million of common stock from existing employees and common stock holders. These shares are understood to have a different valuation to the preferred shares it has just purchased, as they are part of a different transaction – it’s unclear on the valuation of these at this time, but it’s understood to be a lower price.
“This investment demonstrates Facebook’s ongoing success at creating a global network for people to share and connect,” said Facebook CEO Mark Zuckerberg in a statement.
“We’ve worked hard to bring more than 200 million people – 70 per cent outside of the US – onto Facebook to share with friends, family and co-workers. A number of firms approached us, but DST stood out because of the global perspective they bring – backed up by the impressive growth and financial achievements of their Internet investments. We’re looking forward to working with the DST team,” he added.
Discuss in the forums.
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