Reuters are reporting that a group of Facebook investors are trying to offload their stake in the company with the sale of their shares estimated to net $1 billion. That would value Facebook as a whole at approximately $70 billion.
Whilst the headline grabbing figures are significant in their own right the interesting part of this is that with this group of investors seeking to sell off such a large number of shares it could represent a wariness amongst those who invested in the company. That wariness, it seems, is borne out of a concern that Facebook simply cannot keep up its pace of growth in relation to the high market valuations it has received.
Indeed the group of shareholders initially tried to sell their shares for a higher price, a price that would have seen Facebook as a whole valued at $90 billion. To put that figure into perspective, Time Warner and News Corp combined aren't worth $90 billion. Investors have been looking to sink money into Facebook ahead of an expected IPO next year. However, some investors have been declining to get onboard the good ship Facebook over fears that it's valuation is hyped and that it cannot sustain its growth. Reuters cited Tim Draper, a venture capitalist, as having told them that he had passed up on investment in Facebook because of 'unattractive valuation'. Oppenheimer & Co Managing Director Todd Walker summed it up "For Facebook, the larger you get, the harder it is to have that explosive growth."
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