Russia’s DST raising stake in Facebook at $6.5 billion valuation

October 2, 2009 | Kim-Mai Cutler | Comments | |

dstRussia’s Digital Sky Technologies is boosting its stake in Facebook by buying from existing shareholders, Reuters is reporting.

Offering the same $14.77 a share it put forward earlier in July, the Russian investment firm is turning to shareholders who aren’t Facebook employees to raise its holdings by up to $100 million. DST held a 3.5 percent stake in the company after a $200 million direct investment plus $100 million it spent purchasing current and ex-employee shares over the summer.

The move comes on the heels of Facebook’s announcement that it’s “free cash flow positive” or making money after setting aside capital to maintain and grow its technology infrastructure. SharesPost, a secondary market for more illiquid holdings in private equity or venture-backed companies, lists its highest offer at $14.42 a share.

DST is going after employee shares, which are valued far less than the preferred stock that other investors and DST already owns through its earlier round. The investors’ preferred shares include special privileges, typically including the right to re-invest, the right to sell their stock first, and possibly a board seat or two. Common stock is stock without privileges.

Facebook declined to comment.

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About the Author, Kim-Mai Cutler

Kim-Mai was born and raised a stone's throw from Apple headquarters in Cupertino by a devout Hewlett-Packard family. After attending UC Berkeley, Kim-Mai worked for Bloomberg, The Wall Street Journal and Dow Jones Newswires in New York, Los Angeles, London and Buenos Aires. Follow her on Twitter at @kimmaicutler, and follow VentureBeat on Twitter at @venturebeat.

  • Adam
    How does 14.42 = $5 billion and $14.77 = $6.5 billion?
  • The common shareholders do get one "privilege" as to electing 3 of 5 BoD members. Reference the filing on 05/26/2009. "Three directors (the "Common Directors") shall be elected by the holders of a majority of all of the outstanding shares of Common Stock voting as a single class. The Series A and Series B each get to elect 1 each based on other terms.
  • I really think that solar power is the way to go! Renewable energy sources ftw! Right now you can even power your laptops from solar power and i am so getting one for me and installing it, at least a small array...