On January 21, 2011, Facebook, the leading social networking site of the world, announced that it has completed raising a $1.5 billion fund to expand its business.
It also announced to disclose its financial reports by April 30, 2012.
Most of the fund came from Goldman Sachs, the investment bank raised $1 billion from its overseas clients while Goldman and Sachs and a Russian investment firm called Digital Sky Technologies provided another $500 million.
On January 21, 2011, Goldman Sachs completed the offering of “Facebook Class A common stocks” to its overseas clients while in late December 2010, Goldman and DST raised $500 million.
Not only did the Goldman Sachs funding pushed the market value of Facebook to $50 billion but also made Facebook and Goldman Sachs subject to constant media scrutiny for the companies were believed to be circumventing the U.S security laws and refrain from disclosing financial information to the people.
If a company has more than 499 shareholders, according to the U.S. Security laws, it would have to disclose its financial information to the public and Facebook would cross that limit sometime this year even without the Goldman Sachs funding.
Of the $1.5 billion fund, Facebook has the option to accept somewhere between $375 million and $1.5 billion from Goldman Sachs but Facebook would only accept $1 billion. In a statement Facebook said that the Goldman Sachs offering was “oversubscribed.”
With the money, Facebook will continue investing in its business.
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