Facebook not worth $15 billion
Federal judge confirms that Facebook placed a different valuation on its own shares
The legal battle between Facebook and ConnectU ended last week, with the judge ordering that a settlement reached earlier should be enforced. Interestingly, the case has brought to light the disconcerting revelation that Facebook is not worth $15 billion as previously claimed.
ConnectU, founded by brothers Cameron and Tyler Winklevoss and Divya Narendra, filed a suit against Facebook founder Mark Zuckerberg in 2004, accusing him of stealing their business plan while they were all undergraduate classmates at Harvard.
A settlement was reached in February - in exchange for an undisclosed amount of cash and a set number of common shares in Facebook, ConnectU would pursue no further claims against the popular social networking site.
It didn't end there. ConnectU tried to pull out of the deal after alleging that Facebook fraudulently misrepresented the value of its stock during discussions. Facebook didn't dispute the fact and the judge confirmed that Facebook had placed a different valuation on its own shares.
So how much does Facebook really think it's worth? The courts won't disclose that but it's potentially bad news for Microsoft and other investors who bought into the company's highly publicized $15 billion valuation announcement last year.