Filed Under:

Facebook's Early Investors May Have Much To Like

Play associated audio

Facebook filed to go public this week, and many analysts expect that it will be valued between $75 billion and $100 billion on the day of its initial public offering. That would make Facebook more valuable than GM, Ford and even Goldman Sachs.

What's most remarkable is that the company has barely 3,000 employees, and many of them are about to become very, very rich.

There's this guy, David Choe. Back in the day, Facebook hired him to paint graffiti murals all over the company's original office space in Palo Alto, Calif. Even Marc Zuckerberg got into the act.

Choe was paid for his work in stock. And according to The New York Times, that stock could soon be worth $200 million.

One of the guilty pleasures of an IPO filing is getting to peer inside a company as famous as Facebook and get a glimpse of who owns what. Of course there's Zuckerberg.

"Obviously, he should be worth a tidy $25 billion," says Henry Blodget, editor of Business Insider and the bad-boy analyst of the last Internet boom.

This time the bad boys are becoming billionaires — like Sean Parker, Facebook's first president. Before that, he co-founded Napster.

"The man who, in the movie at least, famously said 'a million isn't cool — a billion is cool,' " Blodget says. "And he will have several of them."

In that movie, The Social Network, Dustin Moskowitz had little more than a cameo. He was Zuckerberg's college roommate, but he could soon be worth $7 billion.

"If he had been down the hall, we wouldn't be talking about him," says Michael Stern, who runs the website Who Owns Facebook. He says Moskowitz wasn't the only winner of the roommate lottery. Zuckerberg's prep school roommate will get a couple hundred million.

"A lot of people won the lottery here," Blodget says. And, he says, not all of these future billionaires are men.

After Facebook COO Sheryl Sandberg's options vest, "she's going to be one of the richest self-made women ever," Blodget says.

According to its filings, Facebook has close to 1,100 stockholders. Many more could benefit from restricted stock options. But Robert Frank, who writes the Wealth Report blog at the Wall Street Journal and is the author of the new book The High-Beta Rich, says that doesn't mean all these folks will become instant millionaires.

"More than half of this company is owned by just five large shareholders," he says. "So, like most of America, wealth in Facebook is very top-heavy, concentrated among just a few people at the top."

In Silicon Valley, it's become conventional wisdom that Facebook's IPO will create 1,000 new millionaires. And while that may be true, Frank says it's impossible to know for sure.

"Even those with a lot of shares will see their wealth fluctuate wildly. So the number of millionaires may change," he says.

After all, this is a tech stock, and Frank says all this wealth is just on paper — at least for now.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

NPR

Credibility Concerns Overshadow Release Of Gay Talese's New Book

NPR's Kelly McEvers speaks with Paul Farhi of the Washington Post about Gay Talese's new book, The Voyeur's Hotel. The credibility of the book, which follows a self-proclaimed sex researcher who bought a hotel to spy on his guests through ventilator windows, has been called into question after Farhi uncovered problems with Talese's story.
NPR

Amid Craft Brewery Boom, Some Worry About A Bubble — But Most Just Fear Foam

Fueled by customers' unquenchable thirst for the next great flavor note, the craft beer industry has exploded like a poorly fermented bottle of home brew.
NPR

White House Documents Number Of Civilians Killed In U.S. Drone Strikes

The Obama administration issued a long awaited report Friday, documenting the number on civilians who have been accidentally killed by U.S. drone strikes. Human rights activists welcome the administration's newfound transparency, though some question whether the report goes far enough.
NPR

Tesla 'Autopilot' Crash Raises Concerns About Self-Driving Cars

The National Highway Traffic Safety Administration is investigating a fatal crash involving a Tesla car using the "autopilot" feature. NPR's Robert Siegel talks to Alex Davies of Wired about the crash and what it means for self-driving car technology.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.