Goldman Sachs Group, Inc. (NYSE:GS) and Digital Sky Technologies has invested $500 million in Facebook at a valuation of $50 billion. This gives Facebook a higher value than Yahoo!, Time Warner, and eBay.
Facebook will be using the money to hire additional talent, develop new products, and acquire more companies. Facebook employees will also be able to cash out some of their stake. This investment will likely start a debate about what Facebook’s actual worth would be. If Facebook went public today, would their market worth be $50 billion or less?
Goldman put in $450 million and DST put in $50 million. Goldman’s investment in the company means that they could be significantly involved when Facebook has an IPO. Goldman Sachs will be creating a “special purpose” vehicle to allow some of their higher net worth clients invest in Facebook.
[New York Times]