Facebook Enters New $5.5 Billion Credit Deal

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If you were amazed at Facebook's $2.5B credit deal last week, hold on to your seats because this week it's $5.5 billion.

Facebook has a new $5 billion credit deal, doubling a previous $2.5 billion credit agreement as it prepares for an initial public offering. The social networking company based in Menlo Park, California, said in a regulatory filing Wednesday that it has also signed a $3 billion bridge-loan facility to pay taxes on restricted stock units in connection with its IPO. Those are employee shares that will vest when the company goes public.
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I will be happy to sign up for the Facebook 5.5 billion dollar limit Mastercard. Venezula here I come!
 
I'm not an economist and I don't claim to know anything about corporate credit. However, when I ask for an increase in my credit limit, I *might* get it. If I ask a week later to double my previous request, not only would I be laughed off the phone, I'd be answered with a big, fat, not no but "HELL NO". FB must have some pretty solid expectations. I guess, good luck to 'em. At least they are an American company.
 
Yeah I get how credit makes business work... because no one plans ahead anymore... but seriously what does Facebook need to buy that 2.5 billion wasn't enough
 
Has Facebook even pulled in that much profit since its inception? Are the taxpayers gonna get hosed when Facebook defaults on the $10 billion in loans and the creditors get taxpayer funds to cover the loses?
 
BoogerBomb said:
Has Facebook even pulled in that much profit since its inception? Are the taxpayers gonna get hosed when Facebook defaults on the $10 billion in loans and the creditors get taxpayer funds to cover the loses?
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The government will bail them out as too big to fail, and then "all your data are belong to us."
 
^I'd agree..... but aren't all our data already belong to them? They seem to act that way. (slight exaggeration.)
 
BoogerBomb said:
Has Facebook even pulled in that much profit since its inception? Are the taxpayers gonna get hosed when Facebook defaults on the $10 billion in loans and the creditors get taxpayer funds to cover the loses?
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Facebook's profit was $1 billion in 2011, $606 million in 2010 and $229 million in 2009. Losses the two years before that and I'm sure since inception.

The more important measure is cash flow when it comes to debt, and they've been free cash flow positive for 3 years as well. More operating cash flow than net income in 2011 and 2010 which is generally a good thing. It's a real company counter to what many people think. I'm not saying it'll be a good investment though...I haven't looked too closely at it.
 
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