IDG News Service - Facebook has raised $1.5 billion in its latest funding round, putting its total valuation at $50 billion and leaving no doubt about its swift ascent in recent years to become a major Internet player and challenger to Google.
Facebook will use the money to boost its cash reserves and gain "financial flexibility" without significant dilution to current shareholders, the Palo Alto, California, company said Friday.
Not long ago, industry observers worried that Facebook wouldn't be able to turn its massive popularity into a business strong enough to withstand competition from Google and others, as well as acquisition attempts.
Facebook raised $500 million from Class A common stock in December, bought by Digital Sky Technologies (DST), The Goldman Sachs Group and funds managed by Goldman Sachs.
On Friday, Goldman Sachs completed an "oversubscribed offering" for clients abroad who invested in $1 billion of Facebook Class A common stock. The two investments together value Facebook at about $50 billion.
"Our business continues to perform well, and we are pleased to be able to bolster our cash position with this new financing," said David Ebersman, Facebook's chief financial officer, in a statement.
Initially, Facebook intended to let U.S. investors participate in the funding round, but Goldman Sachs decided later to limit it to investors abroad, afraid that the media attention might make it illegal under U.S. securities laws, the bank told the Wall Street Journal this week.
Because Facebook is exceeding the 500-shareholder mark, it plans to start filing public financial reports no later than April 30 of next year, Facebook said.
- Update: Facebook back up after crash
- What to expect in Facebook's earnings call today
- Could you quit Facebook for 99 days?
- Facebook is a school yard bully that's going down
- EPIC says Facebook 'messed with people's minds,' seeks FTC sanctions
- 7 things you need to know about Facebook's mood experiment
- Facebook emotional manipulation test turns users into 'lab rats'
- Facebook tries to stop Snapchat drain with Slingshot
- TMI! Facebook moves to stop over-sharing
- Inside Facebook's brilliant plan to hog your data
- The Brave New World of Customer-Centric Manufacturing The Unique Opportunity for Manufacturers to Better Understand their Consumers
- See the Possibilities Utilizing Data Visualization Do you simply want to collect data, or do you want to derive business insights from it? What if you could quickly and...
- The Future of IT: A Customer First Approach Explore how customer-first policies can make use of social, mobile and cloud technologies to give workers the freedom and flexibility they desire to...
- Aberdeen Group: Marketing Analytics for Manufacturing: Forging Customer Insights There are no recalls for poor marketing. Manufacturers need to get their customer intelligence and messaging right the first time. Learn how.
- Bringing software licenses into compliance A hospital group received a software license audit, so they called in CDW to help define and manage their software licensing status.
- Software license renewal solutions that insure compliance A large design group with a software license renewal challenge employs a software asset management (SAM) tool from CDW to insure compliance. All IT Industry White Papers | Webcasts