Digital Sky Technologies has begun buying more shares in Facebook, seeking to expand its stake in the world’s top social networking company.
DST has begun purchasing shares directly from Facebook’s shareholders, two people familiar with the deal said Thursday on condition of anonymity.
Since its creation in a Harvard dorm room five years ago, Facebook has emerged as one of the Internet’s most popular destinations and is increasingly challenging established powerhouses like Yahoo and Google.
The social networking phenomenon, which counts Microsoft as an investor and has 300 million registered users, is considered one of the tech world’s most promising candidates for an initial public offering, though CEO Mark Zuckerberg said in May that an IPO was “a few years out.”
“Their appetite with me is, ‘Whatever you have, we’ll take it,’” said one of the sources, a Facebook shareholder who agreed to sell his stock to Digital Sky.
According to the shareholder, DST is offering $14.77 a share, the same price paid in July when it bought $100 million of Facebook shares from the social networking site’s employees and ex-employees, at a $6.5 billion valuation.
Facebook employees received priority to sell shares to DST in July, while ex-employees were limited to selling roughly 29 percent of their intended amount because of high demand for the tender offer.
The source said he believed that DST’s agreement with Facebook prevents it from soliciting further shares from Facebook employees and that the firm must now acquire stock from shareholders not employed by Facebook.
DST, an investment group led by Yury Milner that also has stakes in Vkontakte.ru and Odnoklassniki.ru, also invested $200 million in Facebook preferred shares in May. The two transactions gave DST a 3.5 percent stake in the company.
A second source familiar with the matter said DST could buy up to $100 million of additional Facebook shares, though that amount had not been finalized.
“They’re well along the way,” the second source said.
Representatives for Facebook and DST were not available for comment.
Last month, Facebook said it has reached 300 million users — equal to the population of the United States. That is triple the amount it had a year ago.
The company has also said it recently turned free cash flow positive, meaning that it makes enough money to cover operating costs and capital spending.
Facebook director Mark Andreessen said this year that the company will surpass $500 million in revenues for 2009.
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