ConnectU: Facebook's $15 Billion Valuation A Crock, Our Shares Only Worth 25% of That

We know Facebook probably isn't worth $15 billion. So, how about a quarter of that, or $3.75 billion? That's the valuation that Facebook internally assigned to the shares it paid ConnectU -- the company that claims Mark Zuckerberg stole Facebook from them -- in their February settlement.

The claim was made in a document (PDF) filed in during a hearing in the Facebook-ConnectU case, over whether Mark Zuckerberg stole code from ConnectU's founders, settled last week:

The Term Sheet and Settlement Agreement is also unenforceable because it was procured by Facebook’s fraud. Indeed, based on a formal valuation resolution approved by Facebook’s Board of Directors but concealed from ConnectU, the stock portion of the purported agreement is worth only one-quarter of its apparent value based on Facebook’s public press releases.

So does that mean the company is worth $3.75 billion? Not really. The NYT’s Bits blog points out that the number is based on the value of common stock, not preferred shares that Microsoft bought, which carry special rights and are worth more. Microsoft paid $240 million for 1.6% of Facebook, valuing the company at $15 billion.

The common stock that employees (and presumably, ConnectU) received does not come with those provisions. ConnectU wants a new settlement because the stock they received in the deal is worth less than they'd been led to believe.

And if what we're hearing is correct, it's not just ConnectU with misgivings about the value of Facebook's common stock. Several Facebook employees have been trying to cash out at least some of their shares at a $3 billion to $4 billion valuation.

So the real valuation is somewhere in between, but potentially closer to $3.75 billion than $15 billion. (We've already guessed $9 billion.) Have a guesstimate on Facebook's value? Leave it in comments.

See Also:
For Sale: Facebook Shares, 67% Off
It's Official: Facebook Not Worth $15 Billion