4 People You Never Knew Made Millions From Facebook

AAA

4 People You Never Knew Made Millions From Facebook's IPO

Facebook turned a few into billionaires, but many into multi-millionaires from the recent IPO. Although no number has been confirmed as to how many individuals Facebook turned into millionaires, rumors have spread saying over 1,000. As a result, this has created a lot of buzz in Silicon Valley with other industries such as real estate agents and car salesman gearing up for the new millionaires to begin spending their fortunes. The majority of the new Facebook millionaires are employees that received stock or stock options as incentives, but some other unusual names have also surfaced. Take a look at four people you may never thought would have made millions off Facebook.

David Choe

David Choe, an L.A. graffiti artist, painted murals on the walls of Facebook headquarters in 2005 and 2007. Hired by Facebook's president at the time, Sean Parker, Choe was given the option to either be paid for the work, approximately $60,000 at the time, or take company stock. Although Choe thought Facebook was "ridiculous and pointless," he decided to take the stock instead of the cash. It appears Choe's intuition paid off. According to ABC News, the stock today is valued around roughly $200 million dollars. This equates to nearly a 3,333% ROI, assuming the stock was originally worth $60,000.

Bono

The famous front man of the hit band U2 is not only a musician, but also a Managing Director and Co-Founder of Elevation Partners, a private equity firm focused on investing in entertainment and technology companies. In 2009 and 2010, Elevation invested roughly $210 million into the social networking site. At the time of the IPO these shares had skyrocketed to a valuation around $1.5 billion. Not all of this is Bono's cash though. The exact amount has not been confirmed, but could be in the range of $40 million. Elevation Partners also currently has holdings in Forbes, MaketShare and Yelp.

Mark Pincus

Founder and CEO of social gaming company Zynga, Mark Pincus was an early angel investor in Facebook. In 2004, according to CNBC, he invested approximately $40,000 in the startup that has now ballooned into about $186,000 million. The two companies (Facebook & Zynga) are closely tied together. The SEC S-1 statement released pre IPO shows Zynga accounts for roughly 12% of Facebook's revenue and nearly all of Zynga's revenue is dependent on the social media giant. Pincus is a veteran in the dot.com space. He has started five companies and has over two decades of experience.

Dr. Edward Zuckerberg

Father to Mark Zuckerberg, Dr. Edward Zuckerberg is a dentist in Dobbs Ferry, N.Y. running his own practice. In 2004 and 2005, Dr. Zuckerberg provided working capital for Facebook and was issued an option to purchase 2 million shares with an expiration of one year. The option was never exercised, but in 2009 the Facebook board issued 2 million Class B common stock to Glate LLC, a company controlled by Dr. Edward Zuckerberg. At the IPO price of US$38, Dr. Zuckerberg's shares were worth an estimated $76 million.

Conclusion

The IPO turned out to be a huge disappointment for the investing community and many retail investors lost money as a result. This didn't stop early investors from striking it rich. Mark Zuckerberg alone has sold around 30 million shares for about $1.13 billion. Early angel investor Peter Thiel has also sold nearly 17 million shares worth $633 million. Unfortunately, this is common with many IPOs. Early investors and company insiders sell large portions of their shares and cash out big, leaving the retail investors to buy the very shares insiders are selling. Facebook still has a strong business model and revenue of around $1 billion dollars. If you believe that Facebook is a company here to stay for the longterm, the shares may currently be at an attractive price.
  1. No results found.
Related Articles
  1. Investing

    Should You 'Like' Facebook in Your Portfolio?

    When it comes to your portfolio should you like Facebook?
  2. Insights

    4 Companies That Facebook Should Buy

    Facebook will start looking to acquire startups that can help in its ongoing expansion.
  3. Investing

    Bull Vs. Bear - Facebook May Not Have The Long-Term Value

    Investors are now reassessing the real growth potential of Facebook and that has led to some painful realizations about the stock's value.
  4. Small Business

    Facebook’s Rise to Global Ubiquity (FB)

    Looking at Facebook’s advertising metrics, growth rates, and do-good initiatives, it becomes clear why the stock has become a fan favorite.
  5. Small Business

    Facebook Money Transfer: Transforming E-Commerce

    Facebook's payment service holds huge prospects for Facebook’s business. Here’s how it works, and how it will impact e-commerce and Facebook's business.
  6. Investing

    If You Had Invested Right After Facebook's IPO (FB, TWTR)

    Find out more about how much you would have made if you invested $1,000 into Facebook Incorporated right after its initial public offering.
  7. Investing

    Is Facebook Still a Bargain at All-Time Highs? (FB)

    Despite the strong gains the stock has already made, Wall Street sees no meaningful signs that Facebook will slow down anytime soon.
  8. Small Business

    How Facebook Leverages Your Posts to Swift Growth

    How Facebook has monetized your personal info into an economic powerhouse with robust growth.
  9. Insurance

    Evaluating The Facebook IPO

    Facebook's IPO is sure to be the biggest IPO of the year. Find out what to expect.
  10. Investing

    Facebook Q4 Earnings Preview

    Under fire over fake news, Facebook has to prove that it can still grow profits as it invests for the future.
Hot Definitions
  1. Pro Forma

    A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results ...
  2. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  3. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  4. Portable Alpha

    A strategy in which portfolio managers separate alpha from beta by investing in securities that differ from the market index ...
  5. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
  6. Hard Fork

    A hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions ...
Trading Center