Facebook gets $6.5 billion valuation with share sale

San Francisco
The Economic Times
Facebook netted a $6.5 billion valuation for its common shares on Monday, further underscoring the fast-growing Internet social networking site's high rank among technology and media industry heavyweights.

Russia's Digital Sky Technologies said it will pay $14.77 a share for Facebook common stock, boosting its stake to as much as 3.5 percent and valuing Facebook at about $6.5 billion.

While that is below the $10 billion valuation set by Digital Sky's May investment in Facebook, which was for preferred shares, investors have been valuing the social network's common stock at less than $5 billion in secondary markets in recent weeks.

The deal suggests that Facebook has a higher market value than many established media and tech companies, which generate significantly more revenue than Facebook, including CBS Corp and Salesforce.com, as at least one blog pointed out on Monday.

CBS, which had $13.95 billion in revenue last year, has a market capitalization of $4.06 billion and Salesforce.com had a $4.72 billion market cap at Monday's market close.

Facebook is expected to breach $500 million in sales this year, according to board member Mark Andreessen. The company has said it expects revenue to grow 70 percent this year.