AP: Facebook Settled ConnectU Case for $20 Million in Cash + 1.25 Million Shares of Stock
Yesterday, we reported the story from Law.com in which Quinn Emmanuel, counsel for ConnectU in its case against Facebook, claimed in a marketing brochure that its settlement in the Facebook suit was valued at “$65 million.” Today, the AP has uncovered additional data about the settlement by (of all things) copying and pasting text from a court document and accidentally finding redacted information.
According to the report, Facebook paid the founders of ConnectU $20 million in cash and 1.25 million shares of stock which – depending on the valuation used – pegs the valuation of the company at either $3.7 billion (Facebook’s own appraisal) or $15 billion (the valuation if the price Microsoft paid for its preferred shares were applied across the table).
Under their settlement, Facebook agreed to pay ConnectU $20 million in cash and 1,253,326 shares of common stock. The stock was worth $45 million, based on the Microsoft valuation, but only $11 million under Facebook’s own appraisal.
That means ConnectU received anywhere from $31 million and $65 million for settling the suit, depending on which stock valuation is used.
The $20 million cash payment certainly raises eyebrows given the apparent light weight of ConnectU’s case. For more details on the history of the case and settlement, click here.














February 12th, 2009 at 10:15 am
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