Facebook Creates a New Millionaire’s Club…And a Few Billionaires Too
Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg
The millionaire's club has to make room for a few more hundred people...at least.
Facebook filed to go public on Wednesday and many current and former employees are expecting huge paydays. The public offering could value the social media titan between $75 billion to $100 billion and for those employees who received stock options, their personal worth could equal several hundred million dollars.
Facebook Co-Founder Mark Zuckerberg, 27, is slated to become one of the richest people in the world with a personal fortune of at least $28 billion. His salary will be cut to $1 from $1.48 million last year, effective Jan. 1, 2013.
Facebook Chief Operating Officer Sheryl Sandberg, who made $30.8 million last year, will enter the billionaire's club for the first time and early Facebook investors like Peter Thiel and venture capital firm Accel Partners are both expected to net profits in the billions.
Even Facebook's biggest foes - Tyler and Cameron Winklevoss - will become richer, thanks to the 1.2 million shares they own, part of the settlement deal they agreed to after suing Zuckerberg for stealing their idea. (Have you seen The Social Network?) Zuckerberg dropped out of Harvard to concentrate on expanding Facebook, which he started with a few friends in his sophomore college dormitory eight years ago. Facebook has 845 million users worldwide.
The New York Times profiled graffiti artist David Choe as one example of how Facebook's public offering will change the lives of thousands of people. Choe was hired to paint murals on the walls of Facebook's Palo Alto office in 2005; instead of taking cash as payment, he accepted several hundred stock options. Those shares could be now worth north of $200 million.
Zuckerberg's father Edward, a dentist in New York, will also greatly benefit from the IPO. He was given two million shares "in satisfaction of funds provided for our initial working capital," according to Facebook's S1 filing.
One person left out of the Facebook filing is estranged Co-Founder Eduardo Saverin. Zuckerberg's former best friend and roommate, and the one who provided the company's early financing, Salverin has sold a majority of his stake (worth five percent) of the company on the secondary market.
Business Insider's Nicholas Carlson joined The Daily Ticker's Aaron Task to discuss the Facebook IPO and how the newly-minted Facebook millionaires will be spending their money. Google's IPO in 2004 made many people rich, but Facebook's public offering takes it to another level.
"It's a monument to capitalism," Carlson says. "A thousand millionaires overnight."
Thanks ~ Morgan Korn
Pick 3
Method 1: 1-7-0
Method 2: 9-4-9
Method 3: 9-7-7
Method 4: 4-3-4
Method 5: 6-6-2
Method 6: 8-2-3
Play 4
Method 1: 2-7-3-5
Method 2: 0-0-6-4
Method 3: 9-9-9-7
Method 4: 1-1-6-8
Method 5: 0-3-3-6
Method 6: 1-1-2-1
$$$$$$$$$$
Mark Zuckerberg's Lackluster Love for Profits
By now you've heard, Facebook filed paperwork to sell shares of the company to the public on Wednesday. The I.P.O. is expected to top Google's record $1.67 billion 2004 tech offering with a value between $5 billion and $10 billion, making the company worth a hefty $75-to -$100 billion.
The S1 form, which gets submitted with the Securities and Exchange Commission by companies that wish to go public, is filled with details never before seen by the outside world. In the case of this generation's tech giant, the filing contains a treasure trove of information for the media, analysts and investors to devour and discuss with excitement.
Nicholas Carlson spent his Wednesday night pouring over the document with a team of his Business Insider colleagues and joined The Daily Ticker's Aaron Task this morning to hash through the revelations and highlights.
#1 Shocking Number of Users: It's been project by outside forecasting groups that Facebook will hit 1 billion users this year, possibly near the end of summer. The S1 revealed that the company is well on its way to that milestone and could even hit the mark sooner.
The social networking site has 845 million monthly users and 483 million daily users. The number of people in December who used Facebook on the go using a mobile application was 425 million.
To try to comprehend those figures, Carlson compares the number of daily Facebook users to the number of people who tune in for Super Bowl, which is usually the most-watched television broadcast of the year. Two years ago, the Super Bowl game between the Colts and the Saints became the most-watched show of all-time with 106 million viewers. Facebook attracts more than four times the number of people each day!!
#2 Slowing Revenue Growth: Facebook's revenue hit $3.71 billion last year and grew by 88% from 2010 to 2011. But that increase is well below the 154% growth from 2009 and 2010. Profits for 2011 totaled roughly $1 billion.
Facebook derives 85% of its revenue from ad sales. In 2011, Facebook added 42% more ads than the year before and sold them for 18% more than 2010.
#3 Mark Zuckerberg's Lackluster Love for Profits: In a letter to investors included in the filing, Facebook founder Mark Zuckerberg described how he is more interested in social connectedness than money and generating profits.
"Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected," he writes. "We think it's important that everyone who invests in Facebook understands what this mission means to us, how we make decisions and why we do the things we do.
For a man that is now worth upwards of $25 billion, it is hard to believe he does not care about money, says Carlson. But to Zuckerberg's credit, Carlson notes Zuckerberg has always said he does not care about money.
In that same vein, Zuckerberg does not want to relinquish control of Facebook like the Google co-founders did when they brought in Eric Schmidt. "He doesn't want people who really care about money to screw it up," says Carlson. "I think he sees them as different and he doesn't want them to really run the company."
Zuckerberg currently owns 28.4% of the company and controls 54% of the voting rights, giving him more power at Facebook than Bill Gates had when Microsoft went public in 1986.
#4 Facebook Risk Factors: Last but not least are the risk factors Facebook sees as potentially harmful to its bottom line. Among a host of factors, the company sees competition from Google, Microsoft and Twitter as a "significant" risk.
Carlson agrees that competition from someone who can do it better and faster is a threat to the company, especially coming from a start-up, which might "do exactly what Facebook did to everybody else."
Thanks ~ The Daily Ticker
Pick 3
Method 1: 8-5-9
Method 2: 1-5-1
Method 3: 9-7-9
Method 4: 0-9-3
Method 5: 9-3-0
Method 6: 9-1-0
Play 4
Method 1: 9-1-7-1
Method 2: 9-8-6-4
Method 3: 4-8-3-7
Method 4: 1-6-6-1
Method 5: 4-2-8-0
Method 6: 3-5-6-3