A GROUP of Facebook shareholders is seeking to offload $1 billion (€674 million) worth of shares on the secondary market, a sale that would value the company at more than $70 billion, according to five reliable sources.
It would represent one of the largest transactions of Facebook shares to date and points to a growing wariness among early-stage investors and employees who fear Facebook’s growth cannot keep pace with its market valuation.
The sellers have lowered their price after previously trying to offload shares at a price that valued the company at $90 billion, which would make Facebook more valuable than Time Warner and News Corp combined. But buyers baulked.
“At the current valuation where it is, it is really hard to justify the investment,” said Sumeet Jain, partner at venture capital firm CMEA Capital, who has examined Facebook deals recently and has passed on the opportunity. “It’s hard to imagine it will turn into a $270 billion company in the next few years.”
The current deal, which includes stock held by Facebook employees, is awaiting approval from top Facebook executives including chief executive Mark Zuckerberg and chief financial officer David Ebersman, according to sources.
Facebook declined to comment.
Investors, ranging from venture capital firms to rich individuals to investment banks, have scrambled to get a piece of the privately held company before its expected IPO next year.
At the start of the year Facebook raised $500 million from Goldman Sachs and Russia’s Digital Sky Technologies, for instance, giving it a market value of $50 billion. – (Reuters)
