The graffiti artist who took Facebook stock instead of cash for painting the walls of the social network’s first headquarters made a smart bet. The shares owned by the artist, David Choe, are expected to be worth upward of $200 million when Facebook stock trades publicly later this year.
The social network company announced its $5 billion public offering Wednesday afternoon, which is expected to value the whole company at $75 billion to $100 billion. Ultimately, that offering will mint a lot of billionaires and millionaires.
Some of them are well known, like Mark Zuckerberg, the company’s co-founder, but many others are not household names. Mr. Zuckerberg, 27, has 533.8 million shares, worth $28.4 billion based on a company valuation of $100 billion, or $53 a share. He also has undisputed control of the company, a remarkable achievement since the company has received financing from some of the world’s top business minds. He owns 28.4 percent of the company outright and he controls 57 percent of the voting rights.
Facebook’s first outside investor, Peter Thiel, the billionaire contrarian, led a $500,000 investment in Facebook in late 2004. He has 44.7 million shares that could be worth more than $2 billion. Elevation Partners, the venture capital firm of Bono, the U2 frontman, paid $120 million for a chunk of Facebook’s shares in 2010 and could receive a payout that would help mask less sage investments in Palm and Forbes.
Accel Partners, whose principal partner, Jim Breyer, invested in the start-up seven years ago, holds 201.4 million shares. Accel could have a thousandfold return on some of its investment.
Sheryl Sandberg, the company’s chief operating officer, holds 1.9 million shares, about 0.1 percent of the company. But she may ultimately collect 38.1 million additional shares, according to the filing, making her one of the richest in a tiny club of Silicon Valley women who are billionaires.
The wealth created by a technology company’s entrance into the public markets has long been startling. Netscape’s 1995 offering made millionaires of scores of people, including its founder Marc Andreessen, now a Silicon Valley venture capitalist who invested early in Facebook and holds 3.6 million shares worth nearly $200 million. When Google went to market with its $1.67 billion I.P.O. in 2004, hundreds of people joined the millionaire ranks, including secretaries, a company masseuse and a company chef.
Bill Gates controlled only 49.2 percent of Microsoft as it went public in 1986. Google’s co-founders, Larry Page and Sergey Brin, each owned about 15 percent of their company when it went public in 2004.
Two factors distinguish Facebook’s turn. For one, the projected value of Facebook is enormous — the largest on record for an Internet company, even several times greater than Google’s offering in 2004. The social network, founded in Mr. Zuckerberg’s dorm room at Harvard eight years ago, is expected to be valued north of $75 billion. Shares of Facebook have already traded on the secondary market, where private shares are bought and sold, above $80 billion.
And unlike Google’s public offering, a large chunk of the wealth tied to Facebook has already been realized, thanks to the thriving secondary market and an eager pool of global investors. Even if Facebook hits only the low end of expectations for its offering, it will still yield some of the greatest returns in the history of venture capital.
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