The IPO, the largest by a technology company, would value Facebook at $104 billion at the top of the range. That’s more than double the $50 billion value at which Goldman Sachs offered $1 billion of stock to non-U.S. clients in January 2011. The firm and the Goldman Sachs Investment Partners hedge fund run by Raanan A. Agus bought $450 million of Facebook stock.
A Bloomberg poll in late January 2011 found that 69 percent of global investors, traders and analysts surveyed thought the $50 billion valuation was too high.
Goldman Sachs, the fifth-largest U.S. bank by assets, is selling 6.18 million of the 14.2 million shares it owns for its own account, according to the Facebook filing. The IPO price range values the bank’s total investment at between $483 million and $540 million. The firm will be cashing out $210 million to $235 million of that total in the IPO.
The gain on Goldman Sachs’s Facebook stake will be recognized in the firm’s second-quarter results, helping to mitigate “weakness in investment banking and trading revenue,” Edward Najarian, an analyst at International Strategy & Investment Group Inc., wrote in a research note yesterday. He cut his second-quarter earnings per share estimate for Goldman Sachs to $2 from $2.60.
GSIP, the fund run by Agus, is selling 1.57 million of the 3.61 million Facebook shares it holds in two different investment pools, according to the filing. At the IPO price range, GSIP will be selling stock valued between $53.4 million and $59.6 million.
Goldman Sachs’s non-U.S. clients, whose Facebook shares are held in a Cayman Islands-based investment pool called FBDC Investors Offshore Holdings LP, have a stake that’s valued between $1.64 billion and $1.83 billion in the IPO price range. The sale will cash out as much as $795 million for that pool.
Michael DuVally, a Goldman Sachs spokesman, declined to comment on the firm’s sale.