Bad news for the Winklevoss brothers, who claim that Mark Zuckerberg stole Facebook from them when they were all back at Harvard: A Federal judge has told the twins that they’ll have to live with the settlement they reached with Facebook earlier this year.
Potentially bad news for Microsoft and every other investor that bought into the company at the much-ballyhooed $15 billion valuation announced last fall — the same Federal judge has confirmed that Facebook has actually placed a different valuation on its own shares. So how much does Facebook think it’s really worth? The court won’t disclose that, but it’s presumably less than $15 billion, because the valuation discrepancy was one of the reasons the Winklevoss brothers were in court: They were arguing that whatever Facebook agreed to give them to go away wasn’t worth what they thought it was.
We’ve embeded the full text of the decision U.S. District Court judge James Ware’s handed down yesterday, but here’s the crucial part:
Apparently, in October 2007, Facebook and Microsoft issued a press release stating Microsoft would “take a $240 million stake in Facebook’s next round of financing at a $15 billion valuation.”… Defendants [Facebook] proffer evidence that subsequent to the press release, in the regular course of its operations, Facebook’s Board of Directors determined a value of the company’s “shares” which was different than the valuation disclosed in the press release.
We assume this has to do with Facebook setting strike prices for employee stock options (note the reference to “in the regular course of its operations”) and nothing more nefarious than that. But we’d still love to know what the real number is. We’ve already guessed $9 billion. Anybody want to take another stab at it?