Start-Ups

Geek Trivia: What three Facebook non-founders stand to profit the most from the company's IPO?

Three individual investors stand to make a substantial amount of money from Facebook's impending IPO -- despite not being company founders.

Facebook is unabashedly the most popular website on the Internet, dominating total time spent online and coming in a close second in total overall web traffic. As such, news that Facebook would finally issue an Initial Public Offering (IPO) of stock sent investors swooning like we haven't seen since 2004, when a little outfit called Google first issued its own public stock. (Google, by the by, is the reigning champ in total web traffic that Facebook has yet to usurp.)

Now, Facebook is not Google, and drawing comparisons between the two is a tenuous exercise -- not least because Facebook is developing its IPO with the knowledge of how Google's IPO went down. For example, there have as yet been no ultra-nerdy math jokes hidden in the Facebook IPO filings. More germane to the financial sector, Facebook is looking at a fairly traditional IPO as opposed to the unconventional "Dutch auction" sale that Google employed, which allowed the search engine's stock to be bought by any accredited trading house from day one.

Put more simply, Facebook's existing investors and private stockholders are going to reap the biggest benefits from the IPO, and it's extremely unlikely that any of us common folk are going to get a shot at buying the stock before its share price skyrockets to record levels. The big winners from the IPO are Goldman Sachs, Goldman Sachs's clients, a handful of venture capital funds, and Facebook's three cofounders: Dustin Moskovitz, Eduardo Saverin, and Mark Zuckerberg.

That said, three individual investors stand to make a substantial amount of money, despite not being founders -- and in the cases of two of them, not being employees -- of Facebook.

WHAT THREE FACEBOOK NON-FOUNDERS STAND TO PROFIT THE MOST FROM THE COMPANY'S IPO?

Get the answer.

About

Jay Garmon has a vast and terrifying knowledge of all things obscure, obtuse, and irrelevant. One day, he hopes to write science fiction, but for now he'll settle for something stranger -- amusing and abusing IT pros. Read his full profile. You can a...

2 comments
rmerchberger
rmerchberger

IPO was March 13, 1986; 8 months after my 18th birthday.... Initial stock price was $21, which would allow me to purchase 47 shares. [[ /me researches a little (read: googles) for value of 1 share then compounded today... ]] 1 share at IPO equals 288 shares today (after splits) which would total 13,536 shares (for the above example.) At current stock price of $32/share, that would be worth $433,152. Not to mention this: Dividends started being paid per share just *after* the latest split - including one monster (the 4th dividend paid) of $3.08/share -- Total dividends paid per share was (if I didn't oops) $6.91/share * 13536 shares = $93,534 earned on dividends; so total value would be $526,685. [sigh] is right...

Jay Garmon
Jay Garmon like.author.displayName 1 Like

...what would it be, and when would you do it? Rules: You can't have bought the stock before your 18th birthday, and you can't spend more than $1,000.00. The easy answer for me is Apple. On Jul 17, 1996 (I was 19 years old, just out of my freshman year at college) and the AAPL stock price closed at $4.22 a share. For my thousand dollars, I could have bought about 237 shares. In Dec. of '96, Apple bought NeXT Computers, paving the way for Steve Jobs's return. Today, those shares would be worth $128,433.65. [sigh]

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