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Are the extremely high Facebook valuations a result of the company's stock structure? I'll admit my only information on the subject comes from The Social Network, but it sounded like only ~35% of the stock was actually sold. So, since investors are fighting over 35% instead of 100% of the company, a more accurate valuation would be .35*50bil = $17.5 billion. Is this remotely reasonable, or am I way off?

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I think Facebook will issue new shares to the new investors so who owns the existing shares doesn't matter. The new valuation is determined only by the total number of shares before the deal, the number of shares being issued, and the size of the investment.

Valuation = new value per share * total shares = (amount invested / # new shares issued) * (# existing shares + # new shares issued)

Although they probably agree on the valuation and the amount of capital to be invested first. Then the number of shares to be issued is set so those numbers to match.

Right, but if the movie is to be believed, then Zuckerberg and several others have non-diluting shares. I'm wondering how much that restriction on the circulating share pool affects the valuation.

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