Facebook’s fundraising oversubscribed at $1.5-bn

Facebook has wrapped up $1.5 billion in new financing led by Goldman Sachs.
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Updated on Jan 23, 2011 10:43 PM IST
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None | By, New York

Facebook has wrapped up $1.5 billion in new financing led by Goldman Sachs. The investments include $500 million from Goldman Sachs and the Russian investment firm Digital Sky Technologies, as well as $1 billion from wealthy Goldman clients.

The round of financing values the social networking giant at $50 billion — ahead of Yahoo and eBay. According to SharesPost, a private marketplace, the private shares of Facebook are trading at an implied valuation of $76 billion.

Facebook said that while it had the opportunity to accept as much as $1.5 billion from Goldman’s foreign clients — after American individuals were shut out of the offering — it chose to limit the amount.

“While the offering was oversubscribed, Facebook made a business decision to limit the offering to $1 billion,” it said.

Goldman decided earlier in the week to prevent American clients from participating in the Facebook investment after the plan drew regulatory scrutiny.

Facebook has also confirmed it expected to have more than 500 shareholders sometime in 2011, exceeding a limit set by securities laws, and planned to begin filing public financial reports by April 30, 2012. Facebook said it had expected to pass that threshold even without the Goldman investment.

With its war chest now $1.5 billion bigger, what does Facebook plan to do with the new money? Nothing, for now. The company said it would continue to invest in its businesses.

“Our business continues to perform well, and we are pleased to be able to bolster our cash position with this new financing,” David Ebersman, Facebook’s chief financial officer, said in a statement. “With this investment completed, we now have greater financial flexibility to explore whatever opportunities lie ahead.”

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