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New Facebook Investment Values Company At $50 Billion

January 23, 2011

Facebook said on Friday that it raised $1.5 billion from investors in a private share offering that valued the company at around $50 billion.

“Our business continues to perform well, and we are pleased to be able to bolster our cash position with this new financing,” Facebook chief financial officer David Ebersman said in a statement.

“With this investment completed, we now have greater financial flexibility to explore whatever opportunities lie ahead.”

The social networking site said U.S. investment bank 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.

Facebook said it expected to surpass the ceiling of 500 shareholders sometime this year and would start filing public financial reports no later than April 30, 2012.

U.S. Securities and Exchange Commission (SEC) rules require firms with 500 or more shareholders of record in any type of stock to publicly disclose certain financial information.

Facebook said it had “no immediate plans” for the newly raised funds, adding that it “will continue investing to build and expand its operations.”

Goldman Sash said earlier this week that it was excluding U.S. clients from the private offering of shares in Facebook.

“Goldman Sachs concluded that the level of media attention might not be consistent with the proper completion of a US private placement under US law,” it said.

U.S. securities law bars public promotion of private offerings and the Facebook deal reportedly attracted the SEC’s attention.

The social networking site has been in the spotlight since U.S. media revealed earlier this month that Goldman had invested $450 million in the company, along with a $50 million investment by Digital Sky Technologies.

Facebook has a bigger valuation than companies like Boeing or Time Warner.

Its annual revenue is estimated at $2 billion though, compared with Boeing’s $64.62 billion and Time Warner’s $26.5 billion.

Facebook co-founder Mark Zuckerberg has resisted pressure to launch an initial public offering to stock in the company.  He was recently named Time magazine’s “Person of the Year.”

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