Facebook employees and investors can now sell some of their stock to Digital Sky Technologies, the Russian investment firm that infused $200 million into the social network this spring.
Part of the deal at the time of the investment would be that Digital Sky Technologies would buy back up to $100 million in common stock from shareholders whose shares have vested.
Now, Digital Sky Technologies is purchasing stock at $14.77 per share, which assumes a valuation of about $6.5 billion for Facebook, according to Brad Stone of The New York Times, who first reported the news. That's lower than the $10 billion valuation at which DST originally invested, as well as the $15 billion at which Microsoft invested $240 million in the fall of 2007. But those two figures are considered to be preferred-stock valuations, not paper valuations.
But $6.5 billion is still a higher valuation than a few months ago. Before DST's investment brought some order to Facebook's internal stock trading, an employee at a firm that brokers privately-traded stock told CNET News that some Facebook employees, frustrated that they had not yet had a chance to cash out stock through an acquisition or an initial public offering, were looking to unload stock at a valuation well under $3 billion.
That sort of trading was difficult for Facebook to control. With the DST investment, employee stock sales became more official and easily regulated.
"While individuals must make their own decisions about participating in this program, I'm pleased that the price DST is offering is much greater than the price originally considered last fall," Facebook founder and CEO Mark Zuckerberg said in a statement. "This is recognition of Facebook's growth and progress towards making the world more open and connected."
On the flip side, the relatively low valuation may mean that Facebook employees will be more reluctant to sell to DST. Some may prefer to hold out for the possibility of an acquisition at a higher valuation, or wait until Facebook goes public--something that always seems to be just off the horizon.
Facebook's valuation has been one of the most talked-about numbers in Silicon Valley, especially as the company (reportedly) toys with the idea of an IPO. There were rumors that Zuckerberg had rejected funding that would value the company at $4 billion, shortly after legal documents from the ConnectU vs. Facebook trial revealed that the company then valued itself at $3.7 billion.
And Facebook can look forward to be even more front-and-center in the gossip industry's crosshairs: the alleged tell-all about the social network's origins, Ben Mezrich's "The Accidental Billionaires," hits stores on Tuesday.