About a week ago, Facebook filed it’s IPO plans with the Securities and Exchange Commission and investors are waiting like shoppers lined up outside BestBuy on Black Friday. There have been, of course, all sorts of debates over what this will mean to new shareholders, Facebook users and to the company itself. There is also widely disparate opinion as to the value of the company. This much is certain – a good number of people will become very, very rich.
Working with a median value for the company of around $75 billion, and share prices in the $30 to $40 range, here are some examples of how some lives will be changed. The 3,000 employees of Facebook are going to become millionaires, and Silicon Valley realtors are beside themselves, imagining their commissions on home sales. Founder Mark Zuckerberg owns 533.8 million shares and could very well realize a personal worth of $28 billion. Chief Operating Officer, Sheryl Sandberg, holds 1.8 million shares. Add in her salary and benefits package, and she could be worth about $2 billion. That would put her in position to be one of the wealthiest self-made women in the world.
Co-founder Dustin Moskovitz is the owner of 134 million shares and, according to the financial wizards, he could end up with around $7.7 billion. David Choe, a graffiti artist, painted some murals for the headquarters of Facebook. Part of his commission was paid for in an undisclosed number of shares. It has been rumored that he will stand to gain between $200 and $300 million. That’s a lot of cans of spray paint. Last, but not least, we have the famous Winklevoss twins who sued Zuckerberg over the original creation of Facebook. Again, their settlement included shares and they will, more than likely, realize about $225 million. Not Zuckerberg’s stratospheric wealth, but not bad.
Of course, there is also the question as to how this will effect users of the popular social network site. Facebook has claimed over 800 million accounts, something about which we will know more when the deal goes through. Facebook may find itself selling users’ data as advertisers find a new place to promote their products – personally designed to fit your needs. They did it once, stopped, but may start up again. That may have an impact on how users’ feel about their privacy. We may already have become numb to it given the fact that you can’t even open your email without somebody trying to sell you things based on what we have searched for or purchased in the past. There’s a whole lot of “Big Brother” out there. It will be up to the individual account holders to weigh sending out pictures of their grandkids versus protecting some personal information. Facebook will probably not have a very tough battle in the United States as everyone, even those holding or seeking political office, has found it a very good way to spread their message. The only roadblock may come from the European Commission, whose regulations surrounding personal information are a little more stringent. I don’t think that Facebook or Mr. Zuckerberg are terribly worried, though. If it makes you feel a little better, Mark Zuckerberg may also have to pay the IRS about $2 billion in taxes.
While we’re on the topic of rich people, I would love to hear your comments about our little close-knit group in the Hamptons.