Facebook finally put out a press release on PR Newswire officially setting the record straight on $1.5 billion in funding. The overseas clientele of Goldman Sachs bought $1 billion, and the bank plus Digital Sky Technologies together invested another $500 million.
The blogosphere will doubtlessly explode with posts about why and how the numbers seem to have changed from what was originally reported by The New York Times on January 2. I don’t think the size of the deal selling to Goldman’s clientele shrank from $1.5 billion to $1 billion because of U.S. investors got shut out of the deal, although that’s a clever idea.
I think the discrepancy more likely has to do with the nature of off-the-record scoops, like the one that started the media frenzy in the first place. Rarely do the early leaks of secrets ever turn out to be accurate. Don’t mistake this as dissing any of the previous coverage of $500 million in direct investment and $1.5 billion from Goldman clientele. Like the release says, Facebook chose to limit the overseas offering to $1 billion, after the bank offered the choice of a range from $375 million to $1.5 billion.
The release consists of one straightforward factual paragraph, a quote from Facebook Chief Financial Officer David Ebersman and then a set of four questions and answers about the deal — all of it appears below, except for the boilerplate at the tail end. The fact that this official statement came out today indicates that the deal has closed. Read on for the release:
Facebook Raises $1.5 Billion
Facebook Receives $1 Billion from Goldman Sachs Overseas Offering; Digital Sky Technologies and Goldman Sachs Also Recently Made $500 Million Direct Investment
Investment Values Facebook at $50 Billion
PALO ALTO, Calif., Jan. 21, 2011 /PRNewswire/ — Facebook today announced it has raised U.S.$1.5 billion at a valuation of approximately $50 billion.
The transaction consisted of two parts. Today, Goldman Sachs completed an oversubscribed offering to its non-U.S. clients in a fund that invested $1 billion in Facebook Class A common stock. In December, Digital Sky Technologies (DST), The Goldman Sachs Group, Inc., and funds managed by Goldman Sachs invested $500 million in Facebook Class A common stock at the same valuation.
“Our business continues to perform well, and we are pleased to be able to bolster our cash position with this new financing,” said David Ebersman, Facebook’s chief financial officer. “With this investment completed, we now have greater financial flexibility to explore whatever opportunities lie ahead.”
The investment generated a significant number of questions from interested parties and Facebook has addressed the most common ones below.
Why did Facebook raise this money?
DST and Goldman Sachs approached Facebook to express their interest in making an investment, and Facebook decided it was an attractive opportunity to bolster its cash reserves and increase its financial flexibility with limited dilution to existing shareholders.
Why did Facebook choose to raise $1 billion in the overseas offering?
Under the transaction’s terms, Facebook had the option to accept between $375 million and $1.5 billion from the Goldman Sachs overseas offering, at the discretion of Facebook. While the offering was oversubscribed, Facebook made a business decision to limit the offering to $1 billion.
What are Facebook’s plans for the proceeds of this transaction?
There are no immediate plans for these funds. Facebook will continue investing to build and expand its operations.
Does this investment mean that Facebook will have more than 500 shareholders?
Even before the investment from Goldman Sachs, Facebook had expected to pass 500 shareholders at some point in 2011, and therefore expects to start filing public financial reports no later than April 30, 2012.
It’s great to see that the social network will indeed begin making financial disclosures to the public by the end of April; and the release doesn’t say anything about whether or when an initial public offering might happen.
Why do you think the total size of the transaction changed from the originally reported $1.5 billion coming from overseas clients of Goldman Sachs to the currently announced $1 billion?
Lots of factors go into making your small business the best it can be. But a look at what will make your business work the best includes a look at not only how you configure your business, but also the best public policy and environment in which small businesses thrive. We thought we’d take a look at some of the factors not only in the U.S. but around the world. What do you think make for best practices in small business. Please enter your suggestions below!
Legal
Do-it-yourself legal work will save your business money. This list of cost cutting suggestions for small business startup includes legal resources that can help you shave legal fees off your launching costs. The Web contains some excellent resources for legal basics. Not all are a substitute for hiring an attorney, but some can save you cash on the simple things. Daily Dose
Don’t forget legal and other details when creating your business. Getting excited with a great idea for a new small business is euphoric. But don’t forget there’s plenty of hard work involved including logistics. Here is a list of just some of the considerations, including some legal issues, you should be considering as you start your new small business. Sentinel Source
The art of hiring an attorney. Hiring an attorney, or attorneys, for your small business isn’t what it used to be, and that can be great news for small businesses struggling to cut costs. A new tighter economy has reduced legal costs and made it possible to negotiate on fees and parcel out the work for increased productivity at lower cost. Here are some very basic starting points. NYTimes.com
Trends
Are you willing to put your brand on the line? A new Maryland designation allows some socially conscious small businesses to do just that. The state’s new “benefit” corporation status lets businesses put their commitment to fair trade, eco-friendly or other specialized goods and products into their charter. So far the states has had 15 companies take them up on the new designation. Would you? The Washington Post
Transparency is the new standard. This law firm is blazing the way in a way that we see across the spectrum in terms of the behavior expected of small businesses and, indeed, all businesses today. Explain the basis of your billing, don’t keep secrets from your clients or try to keep them in the dark. It’s important for businesses to learn how to take a new approach to dealing with customers and each other. Irish Times
Policy
Healthcare battle begins in the U.S. Senate. Opponents of a healthare package seen as unfriendly to small business vow to push for repeal of the legislature in the U.S. Senate following a successful effort in the U.S. House. Attempts to repeal the law in the Senate will be more difficult due to support from the majority support there. A recent survey indicated most small business owners oppose the law which might force many businesses to either offer health benefits or pay a penalty. The Washington Post
Feds change course on anti-business regs. Two regulations pushed by U.S. federal agencies but opposed by business group seem no longer to be on course for implementation perhaps thanks to a change in administration policy. The regs proposed would have required elimination of noise in manufacturing environments and required more testing for medical devices. Your thoughts? WSJ
Global
Tax favoring small business may break EU law. You might think regulations benefiting small business would be viewed as a good thing by everyone. But it turns out a so-called “supertax” on big retailers in Scotland may break EU law. And a large retailer effected by the tax may take it to court. Of course, as much as we support small business here at Small Business Trends we’re not quite sure penalizing another class of business is the way to do it. See the full article. Press Association
Finance
Why more funding isn’t always the answer. Debate continues over the importance of funding to small business growth. But a recent story shows how funding isn’t necessarily the answer to businesses large or small. In this article we see a company that still went bankrupt laying off hundreds and leaving millions in debt, including to other small businesses, after receiving $8 million in funding backed in part by state tax credits. Chicago Tribune
Taxes
Important small business tax changes. There have been some important small business tax changes for 2011 and while not all will make a big difference to your overall tax preparation, it’s important to understand those that do allowing you to make better choices about running you company. In particular, be aware of changes related to the Small Business Jobs Act of 2010. Details in the link above. Herald-Tribune
sxxmnn
joachino
fellinijunior
bigmckee
godblessurtaa
eufleabag
kapokliukas
jesiica
jewjewjewww
coleenawilson
laloulelama
deanwlover
lupineranger
diditomy
jackassjurk
cheesywillie
locostrange
h00sha
No comments:
Post a Comment