Yes folks, you read that right. It seems a Chinese sovereign fund has contacted Citibank and a former Facebook employ requesting help to purchase a not so “huge chunk” of the popular social networking site.
The potential purchase is worth around $1.2 billion in stock, with the investment being shared with another Middle Eastern fund. These rumors are apparently backed up by a “very influential” Silicon Valley investment bank.
Representatives from City Bank and Facebook have refused to make any comments on the possible transaction and the Chinese investment fund didn’t reply to queries on the matter.
Of course, the thought of China getting its hand in Mark Zuckerberg’s honey pot can be a very unsettling one – as Beijing remains known for its less than comforting views on privacy and freedom of speech.
But don’t panic, grab your towel and wipe the sweat away. As big as $1.2 billion sounds, it’s not really anything close to being a “huge chunk” out of Facebook, with the company likely weighing in at $100 billion when it goes public. And it’s not like your personal data was safe there to begin with.
The Chinese sovereign fund is under the full control of the Communist Party. This might coincide with Zuckerberg’s interest having Facebook make a move into China.
Beijing tends to be much more favorable towards local companies, so having a relatively small part of you company owned by China could be a good thing as it would avoid certain problems. If the government gets a part of the profits they will be more likely to overlook certain things.
Another reason to relax: China will be buying non-voting stocks, meaning it won’t have any say in the company’s decisions. And since when are shareholders granted access to private customer information?
Clearly, being a private company, Facebook will have to approve any acquisition. But it is pretty obvious, at least, in my opinion, that approval is likely to be granted, especially considering earlier rumors of Facebook trying to enter China with the help of Baidu, the local search engine giant.
Still, don’t forget that for now, we are just dealing with rumors. So stay tuned for future developments.