GSV Capital climbs aboard the Facebook crazy train

Investment fund scores $6.6 million in private shares of social networking company


Source: Facebook

Publicly traded investment fund GSV Capital Corp. (Nasdaq:GSVC) has purchased 225,000 shares in Facebook at an average price of $29.28 per share, an investment that values the social-networking company at $70 billion.

The $6.59 million deal now accounts for about 15 percent of GSV's total portfolio, the Silicon Valley company said.

(Also see: Facebook Fatigue has begun)

In a statement announcing the share acquisition, Michael T. Moe, GSV Capital's CEO and founder, said, "Facebook is a one-of-a-kind business which has created enormous network effects. With over 650 million people on its platform, or approximately 1/10 of the world's population, Facebook has established itself as a next generation social communications platform."

GSV's stock got a huge boost from the purchase, with shares closing Monday up 4.30, or 41.9 percent, to 14.57, after climbing as high as 15.35.

Obviously investors -- at least at this point, and despite recent indications that Facebook is losing users in developed markets -- aren't lumping Facebook in with companies such as Pandora Media (NYSE: P) or LinkedIn (NYSE: LNKD), whose stumbling ticker performances since their recent respective IPOs seem to indicate Wall Street concerns about social media companies being overvalued.

GSV itself had a public offering on April 28, back when it was called NeXt Innovation Corp., with 3.3 million shares priced at $15 each. It wasn't exactly a moonshot, with the stock closing at 14.60.

Shares drifted down gradually to as low as 10.23 last Friday. Even with Monday's big news, GSV's stock only got 35 cents above the initial offer price. The company's market capitalization now stands at $48.6 million.

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