Goldman Sachs recently invested Rs. 500 million in Facebook – implying a valuation of US $ 50 Billion! Now this can mean many things – let us speculate!
1. Goldman Sachs (GS) genuinely believes that FB has a valuation of $ 50 billion.
2. There is a FB IPO in the offing and GS has upfront paid $ 500 Million to get the mandate.
3. The market is reaching its peak of funny valuations
It is funny that the Russians are investing in a private company – FB need not tell you what it is doing. GS in its mandate says ‘you cannot ask F B’. GS is also acting as a principal (beware when GS is selling it need not tell the other investors what it is doing).
I have no clue about what % age of the proceeds is fees for GS….
OMG if this is not scary………..what is?
for those of you who are serious Google for Ashwath Damodaran’s view on the valuation – as usual it is a well done article.
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