GSV Capital values Facebook at $70 billion

Ronny Kerr · June 27, 2011 · Short URL:

Purchase of 225,000 shares, worth $6.59 million in total, pushes Facebook's valuation higher

Global Silicon Valley Capital Corp., a publicly traded mutual fund, announced Monday that it has bought $6.59 million worth of Facebook stock, valuing the social networking giant at around $70 billion.

The transaction, which saw GSV buying 225,000 shares in Facebook at an average price of $29.28 per share, amounts to 15 percent of the firm’s total portfolio.

We reached out to Facebook for comment, but because the transaction occurred on the secondary market, they’re choosing to remain mum, as they have with other similar investments in the past few months.

Back in March, General Atlantic bought 2.5 million shares in Facebook--one tenth of one percent of the entire company--at a valuation of $65 billion. A month later, T. Rowe Price paid $190.5 million, or $25 per share.

GSV Captial does not currently say which other companies are in its portfolio, though the firm is finalizing deals with "a handful of private company investments," which we should hear about over the next month.

"Facebook is a one-of-a-kind business which has created enormous network effects,” said Michael T. Moe, GSV Capital's CEO and founder. “With over 650 million people on its platform, or approximately 1/10 of the world's population, Facebook has established itself as a next generation social communications platform.”

We’re not sure where exactly Moe is fact-checking, but Facebook hasn’t officially announced the size of its user base in a long time. If your only source was the company’s statistics page, you’d think the site still only had 500 million users. More recent reports, all unconfirmed, say the site is pushing (or has already surpassed) 700 million.

With user count still increasing, earnings reported to be pushing $2 billion this year and just about every site on the Web hopping on the social revolution, Facebook is exciting investors as much as ever. And, as much as ever, the only way to get in with an investment is via the secondary private market.

The Facebook IPO is indeed coming, however, and that day could come by the end of this year or spring 2012.

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