MUMBAI: Digital Sky Technologies and Goldman Sachs have bought a stake in Facebook for $500 million, valuing the social networking site at $50 billion.
Goldman Sachs has put in $450 million while Digital Sky has invested the other $50 million in Facebook. The New York-based securities firm has also made an arrangement that allows its clients buy equity worth as much as $1.5 billion.
The move by Goldman Sachs to make Facebook‘s equity available for its clients may prompt U.S. regulators to find out whether the social networking site is evading any disclosure rules.
Facebook chief executive Mark Zuckerberg has resisted floating shares since it was founded nearly seven years ago. As per the Securities and Exchange Commission regulations, companies with more than 499 investors need to make certain financial information public.
The recent deal indicates how fast the valuations have soared for Facebook which has established itself as a leader in that space. Venture capital firm Accel Partners paid less than $13 million for 10 per cent of Facebook in 2005.
According to the New York Times, Goldman will raise up to $1.5 billion from investors for Facebook as part of the deal.
But a stock market flotation does not look likely for the time being as Zuckerberg recently told US news show 60 Minutes that he did not see selling the company or going public as an end goal.
Microsoft bought a 1.6 per cent stake in Facebook by investing $240 million in 2007.
Facebook, valued at $50 billion, would exceed the valuations of Web portal Yahoo! and online commerce site EBay. The valuation would also be 25 times Facebook‘s 2010 revenue.
According to comScore, a marketing research company, Facebook‘s astonishing growth of up to 633 million global users by October 2010 has positioned it as the most powerful site on the web.
