A new Reuters report has revealed that a number of Facebook shareholders are planning to sell at least $1 billion worth of shares on the secondary market.
The report (opens in new tab)is based on five unnamed sources who reportedly have a direct knowledge of the situation. The sources also revealed that the group of investors likely to sell their stakes in the company includes a large number of Facebook employees. If the report is true, it will be the biggest transaction of shares in the history of the social networking platform.
It has also been reported that the deal will result in the company’s valuation reaching approximately $70 billion.
Sumeet Jain, partner at venture capital firm CMEA Capital, said in a statement, “At the current valuation where it is, it is really hard to justify the investment.” He added, "It's hard to imagine it will turn into a $270 billion company in the next few years."
The company declined to make any comment on the issue.
Facebook was created by Mark Zuckerberg and a few of his buddies in 2004 while they were students at Harvard University. Originally only open to students at Harvard and a few other select colleges, Facebook now has more than 500 million users worldwide.