Term Sheet

The latest on private equity, M&A, deals and movements — from Wall Street to Silicon Valley

Facebook values itself at nearly $77 billion

April 23, 2012: 3:59 PM ET

Facebook picks a price.

FORTUNE --- I noted this in an earlier post of Facebook's first quarter financials, but I think it deserves one of its own: Facebook is officially valuing itself at just under $77 billion.

Here's how the math works: Facebook recently acquired mobile photo-sharing site Instagram, announcing that the deal was worth approximately $1 billion. Today it provided more specifics, saying that the deal included $300 million in cash and "approximately 23 million shares" of common stock.

That means the stock is valued at around $700 million, or $30.43 per share. Based on the number of shares outstanding, that works out to a valuation of approximately $75 billion.

But a source familiar with the situation says that actual price per share for Instagram was $30.89 per share (i.e., they knew the exact number of shares, not an approximation), which brings the valuation up to between $76 billion and $77 billion.

This is significantly less than the $100 billion that has been bandied around not only in the press, but on the secondary private markets (where Facebook shares have traded in the low $40s).

Chances are, however, that Facebook is low-balling here. Investor interest in the IPO is expected to be intense, with both a price increase and first-day pop likely. Not only does that mean Facebook could still break the triple-digit mark next month, but also means Instagram might actually have gotten much closer to its original $2 billion asking price than people had previously realized.

[Note: This post has been updated. The original post only was based on the S-1(a) filing, not the additional share information]

Join the Conversation
About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

Email a Tip | @danprimack | RSS
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.