We’ve gathered more information on a recent Facebook common stock purchase by DST. The original share buyback was oversubscribed at a $14.77 per share price (roughly $6.5 billion valuation). This most recent sales were done at $25/share, which values Facebook at roughly $11 billion.
That’s not a big jump from Facebook’s $10 billion valuation earlier this year. But that sale was done in preferred stock, which isn’t tied directly to the price of common stock that employees get (that’s why startup employees are able to get stock options at prices far below the recent venture capital valuations). This new sale at $11 billion means new option grants to Facebook employees will almost certainly need to be priced at least at $25/share.
So why is Facebook allowing these sales? They have to. This transaction was initiated by a third party and was going to be run through Second Market. When common holders indicated they wanted to sell, Facebook had to let the sale happen or exercise a right of first refusal. They exercised that right, and have brought in DST to complete the sale.