Goldman Sachs recently invested $450 million in Face book in a deal which valued the website business at $50 billion. However 51% of respondents to a recent Bloomberg poll say the firm’s valuation signals the “beginning of a dangerous new bubble”. The poll was conducted by Des Moines, Iowa-based Selzer & Co. for Bloomberg and has a margin of error of plus or minus 3.1 percentage points.
Facebook raised $1.5 billion in a Goldman Sachs-led financing round in January 2011. In addition to Goldman Sachs’ $450 million investment, Russia-based Digital Sky Technologies put up $50 million and Goldman Sachs clients outside the U.S. bought a $1 billion stake in the company.
According to Bloomberg, Goldman Sachs retained the right to sell $75 million of its stake to Digital Sky but had originally offered Facebook shares to its U.S. clients in a private placement. That was called off after details became public because the offering risked running afoul of U.S. securities laws.
The $50 billion valuation puts Facebook in league with the publicly-traded Tencent Holdings Ltd., the Shenzhen, China-based internet company whose services include online games and instant messaging that is worth more than $42 billion on the Hong Kong stock exchange. Tencent trades at about 15 times revenue. The Facebook valuation is about 25 times its 2010 revenue. Google’s price-to-sales ratio is 9, Bloomberg’s analysts estimate. eBay’s market value is $40.5 billion and Yahoo!’s is $21.2 billion.
LinkedIn Corp., a Mountain View, California-based professional networking firm, has now filed with the Securities and Exchange Commission to raise as much as much as $175 million in an initial public offering.