According to DealBook, Wall Street has made its first big Facebook move, which means an initial public offering might not be that far behind. Goldman Sachs, “considered one of Wall Street’s savviest investors,” is investing $450 million in a deal that values Facebook at $50 billion. Although shares of Facebook in the private market have been trading on the assumption that the company is worth from $50 billion to $56 billion, that was all theoretical without the full financial disclosure that comes with an SEC filing to go public. But Goldman’s imprimatur goes a long way to making that $50 billion valuation look legit. The fact that Facebook just surpassed Google as the country’s most visited website doesn’t hurt, either. Along with Goldman’s $450 million, the deal will also include another $50 million from Digital Sky Technologies, a Russian investment firm that’s already plunked down half a billion in Zuckerberg’s social network and was trying for a chunk of Twitter as well.
Like Google and Microsoft before it, the popularity of Facebook’s shares in the private market make rumors of an IPO in 2012 — something Zuckerberg has tried to brush off — look even more likely. But the SEC might not look kindly on the current arrangement. The agency has already begun to inquire whether companies have been using the private market to exploit the fervor for Internet investments while sidestepping public disclosure requirements. After all, even that figure of $2 billion in annual revenue has yet to be officially confirmed. The SEC might also disapprove of the fact that, as part of the deal, Goldman is also creating a rarely used “special purpose vehicle” to let its rich clients invest up to $1.5 billion as one — skirting the rule that any company with more than 499 investors has to give up their financials.
In case you thought there was nowhere to go but down after winning Time magazine’s person of the year award, with this deal, Zuckerberg’s personal fortune, last valued at $6.9 billion, may double. Larry and Sergey, Zuckerberg’s got your number — your $15 billion-net-worth-apiece number.
Goldman Invests in Facebook at $50 Billion Valuation [DealBook/NYT]