AP: Facebook Settled ConnectU Case for $20 Million in Cash + 1.25 Million Shares of Stock

Yesterday, we reported the story from Law.com in which Quinn Emmanuel, counsel for ConnectU in its case against Facebook, claimed in a marketing brochure that its settlement in the Facebook suit was valued at “$65 million.” Today, the AP has uncovered additional data about the settlement by (of all things) copying and pasting text from a court document and accidentally finding redacted information.

According to the report, Facebook paid the founders of ConnectU $20 million in cash and 1.25 million shares of stock which – depending on the valuation used – pegs the valuation of the company at either $3.7 billion (Facebook’s own appraisal) or $15 billion (the valuation if the price Microsoft paid for its preferred shares were applied across the table).

Under their settlement, Facebook agreed to pay ConnectU $20 million in cash and 1,253,326 shares of common stock. The stock was worth $45 million, based on the Microsoft valuation, but only $11 million under Facebook’s own appraisal.

That means ConnectU received anywhere from $31 million and $65 million for settling the suit, depending on which stock valuation is used.

The $20 million cash payment certainly raises eyebrows given the apparent light weight of ConnectU’s case. For more details on the history of the case and settlement, click here.