Facebook To Winklevosses: Please, We Aren’t Worth Anywhere Near $15B!


How much is Facebook worth?  Depends who’s asking.

AP: Facebook Inc. quickly concluded it wasn’t worth anywhere near the $15 billion market value implied in a 2007 investment made by Microsoft Corp., according to confidential information obtained Wednesday from court documents.

In a transcript of a June court hearing that was closed to the public, lawyers arguing over a legal settlement revealed Facebook’s own appraisal had priced its privately held stock at $8.88 per share, giving it a market value of about $3.7 billion.

Sounds outrageous, but there are some mitigating factors. Microsoft got preferred stock and an advertising deal. The $3.7 billion was based on the common stock:

The Microsoft investment implied Facebook’s stock was worth $35.90 per share — a figure that was relied upon in the settlement of a lawsuit that accused the company’s founder, Mark Zuckerberg, of stealing the idea for his online hangout from three former classmates who started another social network called ConnectU…

In last June’s court hearing, Facebook’s lawyers argued the company’s appraisal of its common stock couldn’t be held up as an apples-to-apples comparison with the Microsoft investment because the software maker bought Series D preferred stock. Microsoft also had an incentive to pay a premium for Facebook’s stock because it wanted to deepen its ties to the company’s popular Web site, whose worldwide audience of 150 million people could eventually attract billions of dollars in advertising.