For all my foolish Facebook friends who posted “Facebook is shutting down March 15!”… smh
CNN reports, “Facebook NOT shutting down March 15.” Check out the report below.
There’s a silly rumor exploding on the Internet this weekend, alleging that Facebook is shutting down on March 15 because CEO Mark Zuckerberg “wants his old life back,” and desires to “put an end to all the madness.”
We have official confirmation from Facebook Director of Corporate Communications Larry Yu that the rumor is false.
We asked him via e-mail if Facebook was shutting down on March 15, to which he responded, “The answer is no, so please help us put an end to this silliness.”
He added, “We didn’t get the memo about shutting down and there’s lots to do, so we’ll just keep cranking away like always.”
Let’s think about this for a minute. Would Facebook decide to shut down the company just a few days after announcing a round of funding, consisting of $450 million from Goldman Sachs and $50 million from Russian investment firm Digital Sky Technologies, on a valuation of $50 billion?
Mark Zuckerberg, the biggest percentage gainer on the Forbes 400 this year, has just agreed to donate $100 million to Newark’s troubled schools. The Harvard dropout’s fortune surged $4.9 billion over the last year as private equity deals place Facebook’s value at around $23 billion. (Illiquid private shares in secondary markets point to an even richer valuation.) Facebook has more than 500 million members and an estimated revenue topping $2 billion. America’s second-youngest self-made billionaire has received a lot of flak in advance of Sony’s biopic, The Social Network, out Oct. 1.
How Will Newark Turn Zuckerberg’s $100 Million Worth Of Facebook Shares Into Cash?
This Friday, Facebook’s Mark Zuckerberg will reportedly appear on Oprah to announce his $100 million pledge to the Newark school system. At only 26 years old, he’s following in the charitable footsteps of Microsoft’s Bill Gates, Berkshire Hathaway’s Warren Buffett and Oracle’s Larry Ellison.
The pledge is the easy part. The difficult question is how will Newark turn the privately owned, illiquid shares of Facebook into usable cash for their troubled school system?
Zuckerberg is worth $6.9 billion, but that is mostly paper wealth based on his ownership of Facebook. Zuck likely has very little cash on hand–he lives in a humble rented house in Silicon Valley. So it’s natural that he’d pledge his Facebook shares instead of cash-money.
The trouble is that these shares are not listed on a registered exchange. Past Facebook transactions have occurred through private equity deals or have traded on exchanges like SecondMarket, which specialize in unregistered, hard-to-trade securities. People at SecondMarket declined to comment on the story.
These markets for unregistered shares are opaque and thinly traded. The current SecondMarket bid for shares of Facebook is $65–that puts a $28.6 billion valuation on Facebook; much richer than recent estimates of around $23 billion. The market price seems inflated.
Another question is how does Zuckerberg donate $100 million shares worth of Facebook, when no one really knows what a share of Facebook is even worth? Will he use an internal valuation, or will Newark simply sell Zuckerberg’s shares in private placements or on the secondary markets until it hits the $100 million mark? Either way, we might get a more accurate view of Facebook’s true value. Wall Street will be watching.