By: Joni Perry and Mark Tsai Group Project for Finance 500 Texas A&M University Central Texas Professor: Dr. Mary Kelly

 Facebook, Inc.: a social networking site.  Founded: 2004  Founder: Mark Zuckerberg  Headquarters: Palo Alto, California  Key People: Mark Zuckerberg (Founder & CEO) David Ebersman (CFO) Chris Hughes (Co-founder) Dustin Moskovitz (Co-founder) Eduardo Saverin (Co-founder)  Accomplishments:  Currently holds 500 million active users  Approximately 70% of users are outside the United States  Over 900 million objects (pages, groups, & events) on Facebook exist  Over 200 million users connect with a mobile device FACEBOOK BACKGROUND

KEY POINTS OF FACEBOOK Time Magazine named Mark Zuckerberg the Person of the Year for The site has been said to have impacted Barack Obama’s presidential campaign, Britain’s recent debt crisis, and the current uprising in Egypt. Facebook is considered the largest social networking site in the world. Has over 2,000 employees and over 20 offices across the world.

GOLDMAN SACHS BACKGROUND The Goldman Sachs Group, Inc.: a global investment bank. Founded: 1869 Founders: Marcus Goldman & Samuel Sachs Headquarters: New York City Key People: Lloyd Blankfein (Chairman and CEO) Gary Cohn (President and COO) Services Provided:  Advising including Environmental Markets, and Mergers & Acquisitions  Financing including Bank Loans, Commercial Mortgage Capital, Equity Capital Markets, Public Sector & Infrastructure Finance, Specialty Lending, and more.  Investing including Asset Management, Closed Ended Investments, Mutual Funds, Private Wealth Management, and more.  Securities including Execution Services, Fund Administration, Pensions, Products, Securities Lending Programs, and more.  Research including Global Investment.

KEY POINTS OF GOLDMAN SACHS The Goldman Sachs Group, Inc. is one of 50 largest banks/bank holding companies in the United States as of December 31, As of 2009, Goldman Sachs employed 31,701 people worldwide. In Business Week's recent release of the Best Places to Launch a Career 2010, Goldman Sachs was ranked #4.

HOW ARE THE TWO CONNECTED? On January 7th, Facebook raised $500 million from Goldman Sachs and the Russian investor Digital Sky Technologies (DST). Goldman Sachs could raise as much as $1.5 billion from investors for Facebook. Goldman Sachs made a minimum investment requirement of $2 million to their clients, to be described as limited partnerships.

On January 17 th, Goldman Sachs limited its offer to foreign clients, which was originally going to be offered to high- net-worth clients. This move raised questions whether Goldman Sachs pushed regulatory boundaries set by the Securities & Exchange Commission. A SURPRISE CHANGE IN PLANS

 According to a press release, Facebook officially raised $1.5 billion, making the company worth about $50 billion.  The transaction included two parts:  Goldman Sachs offered to non-US clients a fund that invested $1 billion in Facebook Class A common stock.  Digital Sky Technologies (DST), The Goldman Sachs Group, Inc., and funds managed by Goldman Sachs invested $500 million in Facebook Class A common stock. THE FINAL DEAL: JANUARY 21 ST

 News about the investment became explosive, raising questions about legalities and if Facebook is really worth $50 billion.  The United States Securities and Exchange Commission is investigating the deal for the following reasons:  Facebook is still considered a private company.  It’s questionable if Facebook has reached its 500 investor limit.  If Facebook has more than 500 investors, it has not published financial reports.  Goldman Sachs may have avoided reaching the 500 investor limit by offering the deal only to foreign clients. CONTROVERSY?!?

 The SEC’s investigation is ongoing.  Facebook issued a press release on January 21 st stating: IN THE END… “Even before the investment from Goldman Sachs, Facebook had expected to pass 500 shareholders at some point in 2011, and therefore expects to start filing public financial reports no later than April 30, 2012.”  Facebook has no immediate plans for their new-found fortune and took the deal to increase cash reserves and financial flexibility.

CNN Video: Is Facebook Worth $50 Billion TOPIC VIDEO

Facebook. (2011, January 18). Retrieved January 22, 2011, from The New York Times: index.html?inline=nyt-org index.html?inline=nyt-org Facebook, Inc. (2011, January 21). Press Room. Retrieved February 23, 2011, from Goldman Sachs Investment Banking. (n.d.). Retrieved February 13, 2011, from Maps of World Finance: institutions/banks/goldman-sachs-investment.htmlhttp://finance.mapsofworld.com/financial- institutions/banks/goldman-sachs-investment.html Goldman Sachs, Inc. (2011, February). Retrieved February 23, 2011, from Goldman Sachs: McCarthy, R. (2011, January 22). As a part of the deal, Goldman Sachs is collecting some large fees from clients, according to Bloomberg News, which obtained a copy of the bank's offering documents. Here's Bloomberg:. Retrieved January 22, 2011, from The Huffington Post: faceb_n_ html faceb_n_ html Rigby, B. (2011, January 21). Facebook to unveil financials, raises $1.5 billion. Retrieved February 13, 2011, from Yahoo News: WORKS CITED

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