By: Joni Perry and Mark

Tsai

Group Project for Finance 500Texas A&M University Central

TexasProfessor: Dr. Mary Kelly

What’s

Facebook

Happening with…

Goldman Sachs

and

Facebook, Inc.: a social networking site.Founded: 2004Founder: Mark ZuckerbergHeadquarters: Palo Alto, CaliforniaKey People: Mark Zuckerberg (Founder & CEO)

David Ebersman (CFO) Chris Hughes (Co-founder)Dustin Moskovitz (Co-founder)Eduardo Saverin (Co-founder)

Accomplishments: Currently holds 500 million active users Approximately 70% of users are outside the United States Over 900 million objects (pages, groups, & events) on

Facebook exist Over 200 million users connect with a mobile device

FACEBOOK BACKGROUND

KEY POINTS OF FACEBOOK

Time Magazine named Mark Zuckerberg the Person of the Year

for 2010.

The site has been said to have impacted Barack Obama’s

presidential campaign, Britain’s recent debt crisis, and the current uprising in Egypt.

Facebook is considered the largest social networking site in the world.

Has over 2,000 employees and over 20 offices across the world.

GOLDMAN SACHS BACKGROUND

• The Goldman Sachs Group, Inc. : a global investment bank.• Founded: 1869• Founders: Marcus Goldman & Samuel Sachs• Headquarters: New York City• Key People: Lloyd Blankfein (Chairman and CEO)

Gary Cohn (President and COO) • Services Provided:

Advising including Environmental Markets, and Mergers & Acquisitions Financing including Bank Loans, Commercial Mortgage Capital, Equity

Capital Markets, Public Sector & Infrastructure Finance, Specialty Lending, and more.

Investing including Asset Management, Closed Ended Investments, Mutual Funds, Private Wealth Management, and more.

Securities including Execution Services, Fund Administration, Pensions, Products, Securities Lending Programs, and more.

Research including Global Investment.

KEY POINTS OF GOLDMAN SACHS

The Goldman Sachs Group, Inc.

is one of 50 largest banks/bank

holding companies in the

United States as of December

31, 2010.

As of 2009, Goldman Sachs employed 31,701 people

worldwide.

In Business Week's recent release of the Best Places to Launch a Career 2010, Goldman Sachs was ranked #4.

HOW ARE THE TWO CONNECTED?

On January 7th, Facebook raised $500 million from Goldman Sachs and the Russian investor Digital Sky Technologies (DST).

Goldman Sachs could raise as much as $1.5 billion from investors for Facebook.

Goldman Sachs made a minimum investment requirement of $2 million to their clients, to be described as limited partnerships.

On January 17th, Goldman Sachs limited its offer to foreign clients, which was originally going to be offered to high-net-worth clients.

This move raised questions whether Goldman Sachs pushed regulatory boundaries set by the Securities & Exchange Commission.

A SURPRISE CHANGE IN PLANS

According to a press release, Facebook offi cially raised $1.5 billion, making the company worth about $50 billion.

The transaction included two parts:Goldman Sachs offered to non-US clients a fund that invested $1 billion in Facebook Class A common stock.

Digital Sky Technologies (DST), The Goldman Sachs Group, Inc., and funds managed by Goldman Sachs invested $500 million in Facebook Class A common stock.

THE FINAL DEAL: JANUARY 21ST

News about the investment became explosive, raising questions about legalities and if Facebook is really worth $50 billion.

The United States Securities and Exchange Commission is investigating the deal for the following reasons: Facebook is still considered a

private company. It’s questionable if Facebook

has reached its 500 investor limit.

If Facebook has more than 500 investors, it has not published financial reports.

Goldman Sachs may have avoided reaching the 500 investor limit by offering the deal only to foreign clients.

CONTROVERSY?!?

The SEC’s investigation is ongoing.

Facebook issued a press release on January 21 s t stating:

IN THE END…

“Even before the investment from Goldman Sachs, Facebook had expected to pass 500 shareholders at some point in 2011, and therefore expects to start filing public financial reports no later than April 30, 2012.”

Facebook has no immediate plans for their new-found fortune and took the deal to increase cash reserves and financial flexibility.

CNN Video: Is Facebook Worth $50

Billion

TOPIC VIDEO

Facebook. (2011, January 18). Retr ieved January 22, 2011, from The New York Times: http:/ /topics.nytimes.com/top/news/business/companies/facebook_inc/ index.html?inl ine=nyt-org

Facebook, Inc. (2011, January 21). Press Room . Retr ieved February 23, 2011, from www.facebook.com: http://www.facebook.com/press/releases.php?p=205070

Goldman Sachs Investment Banking. (n.d.). Retr ieved February 13, 2011, from Maps of World Finance: http://fi nance.mapsofworld.com/fi nancial- institutions/banks/goldman-sachs-investment.html

Goldman Sachs, Inc. (2011, February). Retr ieved February 23, 2011, from Goldman Sachs: www.gs.com

McCarthy, R. (2011, January 22). As a part of the deal, Goldman Sachs is col lecting some large fees from cl ients, according to Bloomberg News, which obtained a copy of the bank's off ering documents. Here's Bloomberg:. Retr ieved January 22, 2011, from The Huffi ngton Post: http:/ /www.huffi ngtonpost.com/2011/01/17/goldman-sachs-stops-faceb_n_809948.html

Rigby, B. (2011, January 21). Facebook to unveil fi nancials, raises $1.5 bi l l ion. Retr ieved February 13, 2011, from Yahoo News: http://news.yahoo.com/s/nm/20110121/tc_nm/us_facebook_7

WORKS CITED

ANY QUESTIONS?