Why The $500 Million Facebook Investment Isn't As Big As It Sounds… And What's Next

Hey, what's cooler than a $500 million investment? Tom Johansmeyer takes a look at the future of Facebook investments.

What’s the ultimate share? A $1.5 billion investment opportunity, courtesy of Goldman Sachs’ elite friend list.

As hard as this may be to believe, the recent $500 million investment in Facebook isn’t as big as it sounds. The company is valued at around $50 billion, and big-dollar investments have become the norm. Digital Sky Technologies put another $50 million into the company, with Goldman Sachs throwing in $450 million.

Of course, when Goldman Sachs gets in on the action it’s worth paying attention. The interesting move, however, is the one that hasn’t happened yet. The firm is setting up a special purpose vehicle that it intends to use to raise $1.5 billion in capital for Facebook through its high-net-worth clients. The capital would come at the $50 billion valuation and, according to the NY Times, was not supposed to be revealed to the public.

So, with the prospect of billions of dollars coming into the company, one question is unavoidable: when’s the IPO?

Unsurprisingly, the company is staying tight-lipped. Some spectators believe that it could come in 2011, though the NY Times reports that a 2012 liquidity event is more likely, given indications from Facebook’s board of directors.

You may share this article on Facebook (and I’d appreciate that), but it won’t compare to what Goldman Sachs is sharing with its best clients … you can bet on that!

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