Facebook now valued at $70 billion

The Facebook social networking web site and service is now currently valued at about $70 billion, thanks to a new investor who is buying a small piece of the still privately owned company. Reuters reports that the GSV Capital Corp investment fund has purchased 225,000 shares of Facebook stock at $29.28 a share. Currently Facebook has about 2.4 billion outstanding shares, according to the article. The article states that with this new stock purchase, the total worth of Facebook is now slightly less than  "Amazon.com Inc, Cisco Systems Inc or Hewlett-Packard Co."

Facebook has received a lot of money from outside investors since it was founded in 2004, including a $240 million cash infusion from Microsoft in 2007. Facebook founder and CEO Mark Zuckerberg owns about 24 percent of the company.  Facebook's user base continues to grow with third party outlets claiming that the company currently has about 750 million registered users.

While Facebook has yet to officially confirm these plans, there are rumors that the company has been in preliminary talks with banks about launching a public stock offering for the company. Such a IPO might launch in 2012. Back in April Reuters also reported via unnamed sources that a number of Facebook shareholders was seeking to sell off about $1 billion worth of the company's stock to the secondary market. The shareholders apparently had some concerns that the company's growth was not keeping pace with its overall value. There's no word if that stock sell off actually happened.

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28 Comments

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Anyone other than "insiders" trying to grab a buck are going to be sorry a week after the IPO.
How a social networking site is "worth" that much is just pie in the sky thinking. Heck, I don't even access FB but maybe once a week or so, and sometimes I see "friends" that haven't updated anything for a week. Not sure what "hot thing" the masses are moving to, but FB days as the hot thing are about over with. Maybe people are using their smart phones instead.

Facebook needs to become an internet service provider. Free web space and domain included. 100Gbps speeds with a 1 gigabyte cap!!! xD

Izlude said,
Facebook needs to become an internet service provider. Free web space and domain included. 100Gbps speeds with a 1 gigabyte cap!!! xD

I'd hit it.

I don't think 70 Billion is too much. not when you factor in how MUCH information Facebook has. How many users do they have again. Over 200 Million users?

warwagon said,
I don't think 70 Billion is too much. not when you factor in how MUCH information Facebook has. How many users do they have again. Over 200 Million users?

Multiply that by three.

DClark said,

Multiply that by three.

Ok ya, so Exactly!

More than 500 million active users
50% of our active users (250 MILLION users) log on to Facebook in any given day
Average user has 130 friends
People spend over 700 billion minutes per month on Facebook

You don't think that is worth a **** ton of money. That is a companies Dream to have that much personal information and to have a in such a way which makes users want to put it in by the droves.

Facebook will soon fall like the rest when your whole site is based on others to post content in a format like social media it will not last

Dusco25 said,
Facebook will soon fall like the rest when your whole site is based on others to post content in a format like social media it will not last

Eventually, unless they expand to elsewhere they don't exist yet or make out of a current social platform something more.

Dusco25 said,
Facebook will soon fall like the rest when your whole site is based on others to post content in a format like social media it will not last

History shows that Facebook will fall. Though unlike other social networking sites, Facebook has more features and is far more entrenched in people's lives, which will make it harder for people to give up.

the420kid said,
anyone check how Myspace is doing lately? that will be FB's fate in a few years.

Yep. Something new will come along and Facebook will be old news. Inevitable.

That's pocket money. $1 trillion, now we're talking. But seriously, that's crazy, I can't see how it is valued at that.

dave164 said,
That's pocket money. $1 trillion, now we're talking. But seriously, that's crazy, I can't see how it is valued at that.

Facebook is the new AOL.

azure.sapphire said,

Facebook is the new AOL.

I don't agree with that. AOL was never Facebook.
Facebook is too big to have a rival.
Google and others are starting from scratch in terms of user-base. Don't see them gathering much, unless they pay people to join Circles.


FMH said,

I don't agree with that. AOL was never Facebook.
Facebook is too big to have a rival.
Google and others are starting from scratch in terms of user-base. Don't see them gathering much, unless they pay people to join Circles.


No, but AOL at one time was the internet to many users, this is pretty much the same. Facebook is not to big for a rival. Tech companies come and fall all the time. What goes up, eventually comes down.

azure.sapphire said,

No, but AOL at one time was the internet to many users, this is pretty much the same. Facebook is not to big for a rival. Tech companies come and fall all the time. What goes up, eventually comes down.


AOL is America Online, right?
Facebook in that sense is, "World Online".

But yeah, I agree with your last line. It just seems that way, but isn't.
Cisco, MySpace, Atari, Netscape can confirm that.

DrCheese said,
Internet bubble much? What is this, 1999 all over again?

Not really, as Facebook actually generates cash. Web start-ups in 2000 just had dumb ideas with no business plan and a bunch of money thrown at them.

Plus, this time it's only private investors who are going to get burned as most of these companies haven't gone public yet.

DrCheese said,
Internet bubble much? What is this, 1999 all over again?
hahaha i'm reminded of that simpsons episode with angry dad now xD

but seriously... 70 billion? i can't wait until another website opens that's more popular than facebook.. and watch it crash!!! you know what facebook is missing? love... what happened to squishy playschool user interface? and page music? and etc...

Xenon said,
More proof of a tech bubble. $70 Billion?!?!

Absolutely and you can get in on the ground floor. I'm willing to sell you a 1/trillionth share of Evn Inc. for the introductory price of $1. Future shares will be sold at $2 so by getting in now you have a huge growth potential: You can own a share of a $2 trillion dollar company for the low price of $1. Act now! Imagine how much money you can make: a $2 trillion dollar company with a quarterly increase of in value of 100%!

Just because a firm is prepared to pay an exceptional fee for a tiny portion of a company doesn't mean that more people are willing to pay a similar fee for the remaining portions of that company.

Facebook isn't worth $70b. Last year Facebook pulled in around $600m in profit. Nike, valued at roughly 40b pulled down 1.4b in profit last year. Manchester United, Valued around 1.5b pulled down $160m in profit last year.

Unless you think facebook can become 10x more profitable sometime soon it doesn't make sense to purchase at this valuation. Is it possible that they'll match the earnings/share ratio of Apple, Microsoft, or Walmart? Maybe, but if they do, facebook would be worth more as a company than all of California. Are there any investors that feel that strongly about facebooks future profitability? A few maybe, but not many.

More realistically these guys see facebook churning out slightly higher profits than what they'd get from a "safer" investment (like bonds or t-bills) and figure $6m in facebook stock will give them the bonus of free mention on news/tv/radio. Worst case, they can sell and minimal losses in the short term. Facebook isn't worht $70b until people have actually put down the money for it (the way they have shelled out $250b for Apple, Microsoft/Intel, etc).