Facebook Raising $150M For Staffers' Stock Buy Back

This story was written by David Kaplan.
Facebook is in the process of wrapping up a $150 million financing as it seeks to buy back stock from hundreds of its employees, Venturebeat reports, citing unidentified sources.  This latest round comes a year after the social net raised an additional $100 million in funding, which was on top of the $360 million in capital it netted over the previous six months. Since existing backers such as Accel, Greylock, Founders Fund, among others, found it difficult to supply such a large amount this time, Facebook has apparently been turning to Asian investors as it seeks to close out the round.

Last month, Facebook COO Sheryl Sandberg said the company was doing fine financially, adding that, "We might take moneybut it doesn't mean we need to."

Facebook did not comment on the report, but it has acknowledged a program that allows staffers to sell up to 20 percent of their common stock shares. Most of the recent speculation about Facebook's funding plans have revolved around its ability to meet rising server costs and weathering the online ad slump, even though eMarketer still expects the site to see those revenues rise 9 percent this year. But as Venturebeat hears it, the proceeds will go towards buying up the approximately 15 million common shares that are currently outstanding as a way to provide its employees with greater "liquidity." This is becoming a favorite strategy among ostensibly valuable, but as yet unprofitable enterprises, considering that the IPO market remains too challenging.

The transaction values each of the 15 million shares at $10 each. But at the moment, those shares are actually worth less than $1, Venturebeat says.

By David Kaplan