Facebook: Who Else Wants to Invest at $15B? No One?

It’s been three weeks since Facebook’s Mark Zuckerberg took a desperate Microsoft to the cleaners with a $15 billion valuation. It’s been 2.9 weeks since Forbes reported that Facebook had raised an additional $500 million from “hedge funds,” lending credence to the idea that the $15 billion valuation was actually reasonable.  And it’s been about 2.8 weeks since that $500 million was hastily revised to a “possible” $260 million by the Wall Street Journal.

Then, last week, after two weeks of deafening silence (and an anti-climactic launch of Social Ads), Portfolio reported that Facebook was still looking to raise that additional cash.  And now, another week later…more silence…

Well, three weeks is eternity in Facebook time (at the company’s prior rate of value-appreciation it would probably have been worth $20 billion by now), and the company has apparently still been unable to close a single additional dollar at that desperate-Microsoft $15 billion valuation.  This suggests a few things:

  • The joke was indeed on Microsoft.
  • The “Social Ads” announcement that Microsoft was obviously privvy to failed to spark the expected interest in anyone else.
  • Facebook’s war chest is going to be smaller than most people anticipated (because the company presumably is not about to obliterate its image by doing a “down-round.”)

Could Facebook still raise some additional capital at the Microsoft valuation?  Yes, it’s possible.  But it becomes less and less likely with each passing day.  Microsoft surely set some time limit by which the round had to be closed (so as to avoid being embarrassed by Facebook raising money at the same valuation a year from now), and as more time goes by, Microsoft has a right to get pissed about other investors investing at the same value with additional information.

Bottom line? With the disappointing launch of Social Ads and the failure to raise additional cash, we may watching the bloom start to fall off the Facebook rose.

See Also:
Oops: Facebook May Not Raise Another $500 Million (Just $260)
Facebook Raises Another $500 Million
Facebook / Google: The Joke is On Microsoft

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