Facebook Shares Bought By GSV Capital Corp, Social Network Valued At $70 Billion

NEW YORK (Reuters) - Investment fund GSV Capital Corp has taken a small stake in Facebook that values the world's No. 1 social networking site at about $70 billion.

The investment fund said on Monday that it had bought 225,000 shares in Facebook at an average price of $29.28 each.

Facebook has roughly 2.4 billion outstanding shares, according to the latest data from secondary market company Sharepost.

Facebook executives have said it is inevitable that they will take the company public, but have not specified a date.

Founded in a Harvard dorm room in 2004 by Mark Zuckerberg, Facebook threatens Internet stalwarts like Google Inc and Yahoo Inc as it becomes one of the most popular destinations on the Web.

It is poised to overtake Yahoo for the biggest slice of U.S. online display advertising dollars this year, with more than $2 billion, according to research firm eMarketer.

Facebook is one of the most anticipated initial public offerings, with investors to clamoring to get a piece of the social networking site with more than 500 million users.

At $70 billion, Facebook would be valued slightly below Amazon.com Inc, Cisco Systems Inc or Hewlett-Packard Co.

But concerns about Facebook's white-hot growth have surfaced in recent months. A group of Facebook shareholders is trying to sell $1 billion of stock on the secondary market in a transaction that also would give the company a value of about $70 billion, Reuters reported in April.

Woodside, California-based GSV Capital invests in high-growth, venture capital-backed companies. The $6.6 million investment in Facebook represents about 15 percent of GSV's total portfolio, the company said in a statement.

Representatives of Facebook and GSV Capital were not immediately available for comment.

Shares of GSV Capital were up 20.3 percent at $12.35 in morning trading.

(Reporting by Jennifer Saba, editing by Gerald E. McCormick and Lisa Von Ahn)

Copyright 2011 Thomson Reuters. Click for Restrictions

Comments

[CaptainPicard]

01:55 PM on 06/28/2011

Facebook = house of paper tigers

[JustinP213]

12:56 PM on 06/28/2011

I plan on buying a lot of shares on the day of the IPO. Then, I'm going to sell them hours later. If I would have done the same thing with Linked-in, I would have made a tidy profit. Yes, I know that I wouldn't get the benefit of capital gains tax. But, I'm not greedy.

[MikeyJaii]

12:37 PM on 06/28/2011

Bubble just waiting to be popped.

[uncc49er]

10:17 AM on 06/28/2011

how can a company be valued 70 times more than its revenue?

[StinkyMoBub]

08:28 AM on 06/28/2011

The manipulations have started...no way it's worth that much.

AAMOF, I suspect it will start to dramatically shrink in size in the not too distant future.

Facebook: Where you are the product!

[sazbad]

02:33 AM on 06/28/2011

These are all hypes. What's the tangible business facebook has? It seems like a hype oriented website like Hi5,Myspace etc. Until they can post a real business model this will be in no time a DEAD website.

[leorangerie]

12:40 AM on 06/28/2011

...and the bitter Winkilvoss bros get richer every second. It will allow them to keep hiring lawyers into the next century.

[nomac]

12:35 AM on 06/28/2011

so that mean my profile page is worth around $140,000 right, i will take that as a check or direct deposit.....

[The JillyBean]

09:39 PM on 06/27/2011

Based on my usage and my friends usage of FB in the last several months, I'd say FB has got a shelf life. It will probably flop on it's face shortly after any IPO. It's nothing short of a giant electronic junkmail interface.

Good luck to the suckers who get stuck holding the stock certificates when this mess gets delisted. :)

[Sandra Stevens-miller]

09:06 PM on 06/27/2011

Congratulations---that means more jobs will be created---good luck!

[StinkyMoBub]

08:31 AM on 06/28/2011

No it doesn't. It simply means rich people will get a first shot at the IPO, extract the profits from fools over-buying after the initial feeding frenzy and then use their newly ill gotten gains to buy politicians to work against the "have nots" of the world...

[KMFIX]

08:01 PM on 06/27/2011

The problem with Facebook, when the trend is over, so is Facebook. Just ask Friendster, Live Journal, and MySpace how things are working out.

[nogimmicks]

07:32 PM on 06/27/2011

The whole thing is beyond ridiculous. A web site that less than 10 qualified developers can put together in a few months, no real patent protection.

[Hardyman1966]

06:47 PM on 06/27/2011

I just loves me some speculatin' when it's done by people showing up as a party is winding down.

[BigDaddyWow]

06:27 PM on 06/27/2011

Come on. Maybe 10-15bn but 70? That's silly. I am guessing that Goldman and the other investors are trying to start the IPO buzz and hype.

[uncc49er]

10:20 AM on 06/28/2011

that is exactly what is happening. The major investors want to convert their shares to real money.

[atexasdem]

05:46 PM on 06/27/2011

I find some of the statements funny. Not long ago the outrage was over Google. Before that it was Amazon. Even Microsoft in it's day was considered an outrage. How about Dell computer?
Technology companies rise like a rocket but can plummet just as fast. Sony, Nokia, Blackberry, even Yahoo for a while were or are in danger of failing. Today's technology rocket can just as easily be tomorrows technology bomb.

[BigDaddyWow]

06:30 PM on 06/27/2011

Good point. However, I think that all of those companies you mentioned had solid business models and the appropriate defensible business. Behind the coolness that is Facebook it's just a web site. Those 500M people could all move to something else in no time; just like my space.

[The JillyBean]

09:41 PM on 06/27/2011

Facebook is today's enron. has no real product, but the only thing tangible is the hype.