Editor’s note: This article was first published in January 2011, and the $50 billion valuation it cites is from then. Facebook did not list until May 2012, in an IPO led by Morgan Stanley rather than Goldman Sachs; its parent company has been called Meta since 2021.
The announcement that Goldman Sachs, together with the Russian group Sky Technologies, is to invest $500 million in the social network Facebook has set off a real stampede of investors. However, Mark Zuckerberg, the network’s creator, is avoiding both listing on the stock market and making its accounts public.
The SEC (Wall Street’s regulator) is watching closely, putting more and more pressure on Facebook to open up to Wall Street and make its accounts public, although Zuckerberg is reluctant for now because he doesn’t want to see people speculating with his creation.
What is clear is that Goldman will be in the front row to handle the deal when the social network goes public. In fact, we’re told there was a long, never-ending queue of investors at Goldman’s window wanting to invest in Facebook.
There are still conspiracy theories around the fact that some time ago Goldman was talking about a bubble when it referred to social networks, and now it surprises us with this investment, which values Facebook at $50 billion.
A second piece of news comes from LinkedIn, which already has its stock market debut planned, with JPMorgan and Morgan Stanley, according to The Wall Street Journal.
Many media outlets are asking why LinkedIn isn’t afraid of what scares Facebook (going public), when its estimated value is much lower than that of the social networking giant. In the end, they all conclude that it isn’t fear but strategy.
While going public will help LinkedIn keep financing itself and create value, Facebook prefers to lay its foundations outside the stock market and let people speculate about its possible value before its real market value is set. What Facebook wants is to make sure that no Wall Street shark can get rich quickly from Zuckerberg’s work.
Further reading
- Facebook is becoming a serious problem for the internet
- The war between Google and Facebook: Facebook thinks it’s clever
Featured image: Rhododendrites, CC BY-SA 4.0, via Wikimedia Commons.
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