Media Money
- Twilight, Inc., A Worldwide Craze
- Oprah to Leave Syndication in 2011
- Sony's E-Reader Shortage and the Digital Book Battle
- Salesforce.com Brings Facebook and Twitter's Social Capabilities to Businesses
- Sumner Redstone's Companies Face Off Yet Again
- Can YouTube Revolutionize Citizen Journalism?
- What MGM's Sale Could Say About Value of Content
- My Exclusive Interview With Bob Iger
- Activision Blizzard's "Modern Warfare 2" Sales Break Records
- Disney's CFO-Theme Park Chairman Executive Swap
RSS FEED
MOST SHARED
- Analyze This?
- Realty Check: USDA Home Loans
- Health Care Bill Nears Test Vote
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Dems Snare 60 Votes to Move Ahead on Health Care
- 100% Mortgage Financing From USDA
- Warren Buffett and Bill Gates: Keeping America Great
- Hirschhorn: Greed...or Fear
- Health Care Bill Clears First Senate Hurdle
- How Stock Investors Can Play Holiday Travel
- Time Lapse World Series Is A Great Play
- Hirschhorn: Greed...or Fear
- My Top 10 Tech Toys for the Holidays
- iPhone a Better Gaming Platform Than Android?
- May Day For Dendreon
- 100% Mortgage Financing From USDA
- Holiday Tipping: Who And How Much
- Deep Discounts Should Make It a Very Tech-y Holiday
- The Richest Members of the US Congress
- New Consensus Sees Stimulus Package as Worthy Step
- Wall Street Jobs Slow to Return Despite Record Profits
- Thanksgiving Week Stuffed With Economic News
- Black Friday Deals May Not Signal Retail Comeback
- Investors to Goldman: Be Less Greedy
- UPS Sets New Rates For 2010
- Victoria's Secret Hopes to Rekindle Desire for Lingerie
- 'New Moon' Takes Record $72.7M Box Office Bite
Text Size 
Correspondent
 |
Russian Digital Sky Technologies (DST), which invested $200 million in Facebook in May, is moving forward with its offer to purchase $100 million of Facebook common stock for $14.77 per share. If shareholders fully accept DST's offer, it will give the Russian fund a 3.5 percent stake in the company. This is no surprise; it's part of the plan announced with DST's investment in May.
This common stock purchase price values the company at $6.5 billion, while DST's purchase of preferred shares in May valued the company at $10 billion. (Microsoft's [MSFT
Loading...
()
] $240 million investment in Facebook in October 2007 valued the company at $15 billion). Facebook is enthusiastic, pleased that the employee buyback program is giving shareholders a chance at liquidity at a higher value than a price discussed last fall. And the lower valuation reflects common rather than preferred stock. And still, this is a pretty hefty valuation for a company that's just barely past the startup stage.
CEO Mark Zuckerberg released this statement: "While individuals must make their own decisions about participating in this program, I’m pleased that the price DST is offering is much greater than the price originally considered last fall. This is recognition of Facebook's growth and progress towards making the world more open and connected.”
Bottom line: this allows shareholders to get a nice chunk of change from a company that says it has no plans to go public, hence eliminating some of that pressure on the company. An additional benefit to Facebook: this kind of stock trading is easier to control and regulate than some previously-. And some employees will consider holding out for a higher valuation or an IPO. The number of employees that take this deal could give a hint at how soon they're expecting another option to exit.
Media, Technology Slideshows On CNBC.com
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes