Facebook coughs up information on Goldman deal

A press release issued by the company confirms what everybody else already knew: that it's raised $1.5 billion primarily from investment bank Goldman Sachs, which has opened up the round to its wealthy overseas clients.

Facebook's recent investment round, led by investment bank Goldman Sachs, has been one of the most-talked-about news events that the social network has gotten itself involved in--and arguably the one about which it's been the most secretive. This afternoon, Facebook broke the silence by issuing a press release in which it confirmed, finally, that it has raised $1.5 billion ($1 billion from Goldman Sachs and $500 million in a round that also includes existing investor Digital Sky Technologies) at a $50 billion valuation.

"DST and Goldman Sachs approached Facebook to express their interest in making an investment, and Facebook decided it was an attractive opportunity to bolster its cash reserves and increase its financial flexibility with limited dilution to existing shareholders," the press release explained, adding that the $1 billion came in the form of an oversubscribed offering to Goldman's overseas clients. That confirms two reports: one, that demand for Facebook stock was unexpectedly high; and two, that U.S.-based Goldman clients could not participate in the offering because of a conflict with securities laws.

"There are no immediate plans for these funds," the press release continued. "Facebook will continue investing to build and expand its operations."

Even the issuing of a press release is rare for Facebook, which prefers to make announcements via posts on its company blog.

Facebook also acknowledged that because of this round, it expects to pass 500 individual shareholders this year and therefore will have to disclose its financials publicly--even if it remains a private company--by the end of April 2012.

About the author

Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.

 

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