Q: How much is Facebook worth? A: $11.25 billion less than last year.

Davey Winder
Wednesday, 09 July 2008 17:06

IT Industry - Market

Sensibly, it got settled in a deal which came in the form of part cash, part stock. ConnectU ended up pulling out of the deal, claiming that the "term sheet and settlement agreement is also unenforceable because it was procured by Facebook's fraud."

So it all went back to court, and the decision went against the ConnectU founders. However, that is far from the last of it because an unsealed transcript from the case has revealed that Facebook is not worth USD $15 billion at all. In fact,the papers would seem to suggest that Facebook itself thinks it is only worth USD $3.75 billion (AUD $3.938 billion) instead.

Of course, this makes things even worse as far as ConnectU is concerned because the settlement, that the court enforced last week, was largely based on shares. The value of which depends entirely upon the valuation of the company itself.

If Facebook is worth USD $11.25 billion (AUD $11.825 billion) less now that it was when that settlement was agreed, and if it knew that it was worth that much less at the time, then I guess it could all be going back to court for a third time.

The truth is, nobody knows how much Facebook is worth. Somewhere between nothing and a lot is about as close as you can get. To find out the real figure we will all have to wait until the day inevitably comes that Facebook opts for an IPO...