Tuesday, November 11, 2008

Blodget: Facebook's latest round of employee stock options are priced about 5% higher than the prior round, our source says, at 4B

"Facebook's common stock is now changing hands in private sales at about a $4 billion valuation, a source says (unconfirmed). And Facebook CFO Gideon Yu is indeed trying to raise money in Dubai, the source says (also unconfirmed).

As we all know, Microsoft, Li Ka-shing, and some German investors paid a $15 billion valuation for some preferred stock last fall. Importantly, this preferred stock takes precedence over the common: Microsoft will get its $250 million back before common shareholders get a cent (common shareholders will get to split up what's left). So it is inaccurate to say that Facebook's valuation has fallen from $15 billion to $4 billion.

But it seems safe to say that Facebook will have trouble selling preferred TODAY at a $15 billion valuation, given the change in expectations for the company's business outlook over the past year. Perhaps Gideon can find some folks in the Middle East stupid enough willing to pay that.

Facebook's latest round of employee stock options are priced about 5% higher than the prior round, our source says, at a valuation just north of $4 billion. (From memory, the source recalled a strike price of $9.27 per share, versus a prior round of $8.90.)

Facebook's revenue this year will be about $265 million, the source says, which is less than the $300 million expected. The source estimates that this is composed of about $180 million of ad revenue, $50-$60 million of virtual gifts, and some smaller revenue items. (unconfirmed)"


Anonymous said...

You probably could have found some easy money in Dubai when oil prices per barrel were over $100.

Good try facebookers - you're slightly better off than googlers but much more naiive.

You still work for the MAN!

Ken A said...


Cases where there is asymmetric information or uncertainty (information inefficiency).

Information asymmetry occurs when one party to a transaction has more or better information than the other party.

For example, used-car salespeople may know whether a used car has been used as a delivery vehicle or taxi, information that may not be available to buyers. Typically it is the seller that knows more about the product than the buyer, but this is not always the case. An example of a situation where the buyer may have better information than the seller would be an estate sale of a house, as required by a last will and testament. A real estate broker purchasing this house may have more information about the house than the family members of the deceased.

facebook guru said...

we laugh at your silly blog. it'
s pretty amazing the dirt you find.

actually things are going well at facebook. we've been able to recruit several google and yahoo employees to our ranks.

we have great talent which will help us develop the best products and service our 100mm plus userbase.