San Francisco: Rock star Bono, Russian tycoon Yuri Milner, and Mark Zuckerberg’s college roommate Dustin Moskovitz have billions of reasons to “like” Facebook.
The seemingly unlikely bedfellows are on the list of Facebook insiders catapulted from rich to dizzyingly wealthy with the initial public offering (IPO) by the leading social network on Friday. At $104 billion, Facebook’s IPO is the largest ever by a technology firm, topping Google’s $23 billion valuation in 2004, and the net proceeds to the company will be $6.4 billion.
Existing shareholders such as early backers, Facebook employees and the underwriters will snap up the rest of the $16 billion raised from the IPO by the California-based social network.
Mark Zuckerberg, CEO of Facebook Inc., (C) applaud after remotely ring the opening bell for trading at the Nasdaq MarketSite from the Facebook campus in Menlo Park, California on Friday. Bloomberg.
The 28-year-old Zuckerberg, Facebook’s chief executive, plans to sell 30.2 million shares with the approximately $1.15 billion raked in to be used to pay taxes on the remainder of his windfall.
Facebook’s second biggest stockholder, venture capitalist James Breyer of Accel Partners, is slated to sell slightly more than 49 million shares in the largest insider payday at the IPO.
Facebook backers reaping IPO riches include PayPal co-founder Peter Thiel, Milner, and U2 singer Bono whose investment through equity firm Elevation Partners got him a 1.5% stake in the social network. Elevation Partners is putting about 4.62 million shares worth $175.6 million at the $38 opening price on the block for the IPO, according to filings with the US Securities and Exchange Commission (SEC). Milner’s investment firm DST Global is slated to sell 45.7 million shares, bringing in about $1.7 billion, while Thiel, who is on the Facebook board, plans to sell 16.8 million shares, according to SEC documents.
Facebook’s Wall Street debut also shines a light on Microsoft’s decision five years ago to buy a 1.6% piece of Facebook for what seemed at the time to be an exorbitant $240 million.
Microsoft’s stake in Facebook is now worth about $1.25 billion at the $38 list price and the technology titan’s relationship with the social network promises to be even more valuable as they combine forces to challenge Google.
Microsoft is set to recoup its original investment in Facebook by selling $249 million worth of stock in the company while holding on to 26.2 million shares.
The list of Silicon Valley celebrities owning precious pieces of Facebook includes Zynga founder Mark Pincus, LinkedIn co-founder Reid Hoffman, Netflix chief Reed Hastings and Sean Parker of Napster music-sharing service fame.
While Pincus and Hoffman cashed in by each selling about a million shares of Facebook stock at the IPO, Parker and Hastings were keeping their stakes in the company intact, according to SEC paperwork.
Facebook co-founders Eduardo Saverin, Chris Hughes, and Moskovitz saw their personal net worth soar with the IPO.
The IPO also made millionaires of a long roster of Facebook employees past and present who were compensated with stock for their work.
“It won’t change much for me,” said Dave Morin, an early member of the Facebook team who left in 2010 to start intimate smartphone social networking service Path.
“I’m a small-town guy from Montana, so everything for me is giving back to the community,” he added. “That’s what keeps me going.”
Like others who have struck it rich in Silicon Valley startups, Morin has been an “angel investor” putting money into companies launched by other Internet entrepreneurs.
“I love skiing and building Internet stuff,” Morin told AFP during a recent interview. “That is just about all I do aside from hanging out with my wife and my dog.”
The IPO is also a jackpot for Los Angeles graffiti artist David Choe, who took a winning gamble by accepting stock instead of cash for murals he painted at Facebook offices in the city of Palo Alto several years ago.
Even the twin brothers who accused Zuckerberg of stealing their idea for the social network while they were all Harvard students will benefit from the IPO. Tyler and Cameron Winklevoss, along with former classmate Divya Narendra, were given a small stake in Facebook as part of a settlement following a lawsuit they had filed against Zuckerberg and the company.