Monday, July 07, 2008

Bits: What Is Facebook Worth? (Part 37)

"There has been some speculation recently about what is being called an “internal Facebook” valuation – a value the company has assigned to its own common stock that is dramatically lower than the $15 billion valuation set so publicly last year by Microsoft’s investment.According to the transcript of a June 13 case management conference in the lawsuit settled last week between Facebook and ConnectU—one of the few documents in the case not under seal— that number is one-quarter the Microsoft valuation, or $3.75 billion. Here’s the relevant section from Page 3 of the document, under the section titled “Defendant ConnectU’s position:”The Term Sheet and Settlement Agreement is also unenforceable because it was procured by Facebook’s fraud. Indeed, based on a formal valuation resolution approved by Facebook’s Board of Directors but concealed from ConnectU, the stock portion of the purported agreement is worth only one-quarter of its apparent value based on Facebook’s public press releases."

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