Out-Law News 1 min. read
12 Feb 2009, 5:38 pm
Facebook has settled a law suit brought by university friends of founder Mark Zuckerberg who claimed that the idea for the company was partly theirs. A pair of separate accidental leaks has revealed not only the settlement payout but also what Facebook itself thinks it is worth.
Earlier this week a marketing communication by the law firm acting for the company bringing the case, ConnectU, revealed that it had won a $65 million payout from the firm.
Now a redacted court document has inadvertently revealed the value Facebook puts on its own, untraded, shares.
Former Zuckerberg classmates Divya Narendra, Tyler Winklevoss and Cameron Winklevoss formed their own social network called ConnectU and claimed that the idea for Facebook was partly theirs.
Facebook decided to settle the case and negotiated a payout that was partly in shares and partly in cash. When it took a $240m investment from Microsoft for 1.6% of the company in 2007, that deal valued the firm's shares at $35.90.
ConnectU agreed to the deal but then wanted to renegotiate when it learned that Facebook itself thought its shares were worth not $35.90 but $8.88.
Those figures have emerged following the publication of a copy of the California court's ruling last summer that both parties must stick to the original deal. The figures in the document were redacted but Associated Press cut and pasted the text into another document and found that the values were visible.
The payout to ConnectU was $20m in cash plus 1.25 million shares, which are worth $11m at the Facebook valuation and $45m at the Microsoft stake valuation.
