Goldman Sachs Invests $500 Million in Facebook, Currently Valued At $50 Billion (GS)

Dealbook is reporting that Goldman Sachs GS has invested $450 million in the social network site Facebook at a valuation of $50 billion. The report cites unnamed sources familiar with the transaction, and says that Russian investment firm Digital Sky Technologies, which has already plowed hundreds of millions of dollars into Facebook, added another $50 million. The new infusion of capital has interesting timing. Facebook CEO Mark Zuckerberg has repeatedly resisted the idea of an initial public offering (at least until 2012), stating that he'd like at least another year of growth without the scrutiny that comes with being a publicly-traded company — least of all one with Facebook's notoriety. Meanwhile, the Securities and Exchange Commission recently opened an investigation into the trading of shares of privately held companies like LinkedIn, Twitter, Zynga and Facebook on sites like SecondMarket and SharesPost. Many have speculated that the SEC is looking into the size of the shareholder base, as once the number of shareholders in a company reaches 500, that company must begin publicly disclosing its financial results. According to Dealbook, Goldman is even planning to create a "special purpose vehicle" to allow its clients to invest in Facebook and skirt this rule. The authors of the Dealbook article, Andrew Ross Sorkin and Evelyn Rusli speculate that Facebook could use the money "to steal away valuable employees, develop new products and possibly pursue acquisitions — all without being a publicly traded company. The investment may also allow earlier shareholders, including Facebook employees, to cash out at least some of their stakes." Regardless of what Facebook plans to do with the investment, it is clear that their valuation is surging: just a couple months ago Accel Partners sold its stake in Facebook at a valuation of $35 billion, representing a roughly 43% increase over this period. It is now worth more than eBay EBAY, Yahoo! YHOO and Time Warner TWX.