Twenty-Three Year-Old Facebook Founder worth $5 billion

[MJ DeMarco]

Thread is as old as this forum! Interesting to see the wide variety of opinions for something emerging ... emerging to ubiquity? Or emerging into oblivion?

Perhaps in 5 years we'll be looking at the Cannabis and Crypto threads to see how opinions materialized, or didn't.

 

[MitchC]

Facebook is the real deal. Trust me. Advertisers can reach out to 100s of millions of people via this social networking website. It has a wider reach than any other medium. Think how much advertisers will pay for spots on FB. Zuckerberg is going to keep his billions and more. He's the 21st century Bill Gates. This may sound crazy but, I believe he will be richer than Gates in a few years.

People today spend more time online than watching TV. The internet is bigger than TV. FB is the internets top dog. Worth every penny. You have millions of people who sign into Facebook every single day and spend hours. Imagine how much advertisers will pay to reach these people ? Imagine how many goods and services you can sell via FB. Facebook has it own economy with people being able to buy gifts to post on their friends profile pages. Its crazy. U guys need to join FB and see for yourself.

Peter2, I recommend you sign up on FB and you will see what I mean.

If you have any predictions for the future I’m all ears, incredibly accurate prediction.

 

[Scot]

I'm pretty sure he is not even a millionaire. That valuation is just stupid fiction and will never translate in to real life. My guess is that they could get $3 billion for the company today, and that is waaaaaaaaaay to high for a company with that kind of revenue and profit.

Mark would get about $900 million of that. Not a bad amount, but far from $5 billion, however it could go the way of Friendster and be worth a fraction of these numbers very quickly.

Welp.. this comment didn’t age well now did it haha

 

[imirza]

Facebook is the real deal. Trust me. Advertisers can reach out to 100s of millions of people via this social networking website. It has a wider reach than any other medium. Think how much advertisers will pay for spots on FB. Zuckerberg is going to keep his billions and more. He's the 21st century Bill Gates. This may sound crazy but, I believe he will be richer than Gates in a few years.

People today spend more time online than watching TV. The internet is bigger than TV. FB is the internets top dog. Worth every penny. You have millions of people who sign into Facebook every single day and spend hours. Imagine how much advertisers will pay to reach these people ? Imagine how many goods and services you can sell via FB. Facebook has it own economy with people being able to buy gifts to post on their friends profile pages. Its crazy. U guys need to join FB and see for yourself.

Peter2, I recommend you sign up on FB and you will see what I mean.

 

[MJ DeMarco]

He is a millionaire on paper, but I don't think he has cashed out anything, so it's not like he could buy a $30 million home today.

He did cash out and experienced a liquidity event -- 1.6% of his shares (which are privately owned) -- this was his liquidity event, his sale - $240M. As the article states,

"Rapidly rising Internet star Facebook has sold a 1.6 percent stake to Microsoft Corp. for $240 million, spurning a competing offer from online search leader Google."

Microsoft has to pay $240M and as far as I know, it doesn't go to Facebook, it goes to the founder(s) who sold shares - he is liquid that amount at least until the IRS hits him for the capital gains on it.

In fact, the only way that the shareholders (including the founders) make any money is if there is a liquidity event -- a public offering, a private buy-out, a merger, etc.

This acquisition was a private buy-out, a partial liquidity event of 1.6%. If you sell X% of your company, you receive a "liquidity event" as the proceeds goes to the founders. This wasn't a $240 million "investment" or "funding" - it was a sale of privately held shares.

That makes Zuckerberg worth 240M liquid and 15B illiquid.

 

[MJ DeMarco]

Not even close. He does not own 100% of the company.

Either way, these type of sites are no different than night clubs. They are only popular for a short time until the next best thing is coming along.

$240,000,000 X (His ownership stake) = His liquid.

Im not privy to his ownership stake, but I'm sure it was more than 50%.

$120M isn't exactly pocketchange.

Point I'm making is: A 1.6% sale was a liquidity event that would be substantial to anyone, especially a kid in his early 20's.

Microsoft doesn't pay $240 million and that money goes no where, or is put into some special account - it goes to whomever sold the shares. As far as I know, Zuckerberg was the primary shareholder.

 

[CRBFL]

How To Make A Million Bucks In A Week From Facebook

Uber interesting.

 

[GPM]

Forgive me for resurrecting a thread from 2007, but I thought it was interesting to see how people viewed facebook. It has now been 5 years later and facebook is still around and it is a giant. I personally do not use it and can’t stand it, I had it for a while but the constant stalking by ex’s and people who I may have passed by the hallways in high school really freaked me out.

Mark Zuckerberg’s current wealth is roughly $9.4 Billion, I am not sure if that was taken before or after FB’s disastrous public offering.

Facebook Inc. (NASDAQ:FB) has a market cap of roughly $65 billion.

Can we do another poll and see where we think FB will be in 5 years? Personally I think it will go the way of the dodo, but what do I know.

 

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[JunkBoxJoey_JBJ]

Forgive me for resurrecting a thread from 2007, but I thought it was interesting to see how people viewed facebook. It has now been 5 years later and facebook is still around and it is a giant. I personally do not use it and can’t stand it, I had it for a while but the constant stalking by ex’s and people who I may have passed by the hallways in high school really freaked me out.

Mark Zuckerberg’s current wealth is roughly $9.4 Billion, I am not sure if that was taken before or after FB’s disastrous public offering.

Facebook Inc. (NASDAQ:FB) has a market cap of roughly $65 billion.

Can we do another poll and see where we think FB will be in 5 years? Personally I think it will go the way of the dodo, but what do I know.

How I stumbled here is beyond me...but here we are again.

Time flies.

 

[Xeon]

Wow, a thread from 2007. A blast from the past.

Turns out....most of the folks who commented in 2007 were wrong....

 

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[JunkBoxJoey_JBJ]

Wow, a thread from 2007. A blast from the past.

Turns out....most of the folks who commented in 2007 were wrong....

And last comment was really in 2013, so oddly enough here we are again, “again”.

 

[TonyStark]

Ugh! I was 14 when this happened. I’m mad at myself.

What was I doing with my time?

Probably nothing important.

Smh.

 

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[MJ DeMarco]

I think you're wrong on this one MJ...

According to Microsoft during today's conference call, the investment was in an "equity stake in Facebook's next round of financing at a $15 billion valuation":

http://seekingalpha.com/article/51455-microsoft-facebook-partnership-announcement-call?source=yahoo

Who knows...perhaps it was Zuckerberg's shares that got sold, but there's no indication that's the case from what's been covered publicly.

Thx JScott althought I wouldn't say wrong (wrong in this scenario), but more like ill-informed! :smxB: None of the articles I read stated "equity stake" (and I looked for it) so in light of this information, the original suppositions are correct and makes this an entirely different story - then the $240M goes into company coffers instead of founder's pockets. What I was saying wasn't incorrect - just incorrect for this particular acquisition.

 

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[Andrew]

Here is what I think about Facebook.

First, advertising. I heard a lot about it not being a good deal. I tried it out, the traffic is high quality. Just today I was looking at one of my Google ad campaigns and noticed that what appears to be a third-party Facebook application was sending me the best converting traffic of the day. I am not over-paying for any of my advertising. This tells me that Facebook has enormous room for boosting their advertising revenue.

Facebook may very well turn out to be "the Google" of social networking web sites. A lot of search engines came before Google. Other than Yahoo, they are all history. Google got it right, at the right time (post-dot com bust.) Facebook is doing a lot of things right and users are happy. The same can not be said of either Friendster or Myspace.

If Facebook does stick, that $15 billion isn't a crazy number by any stretch.

 

[piranha526]

Zuckerberg is going to keep his billions and more. He's the 21st century Bill Gates. This may sound crazy but, I believe he will be richer than Gates in a few years.

You are mistaken here. The Google guys are the next Bill Gates(s).
Microsoft is forced upon user and Facebook is a choice. Could be a here today, gone tomorrow story (with a blink of an eye).

Microsoft wasn't and isn't going anywhere fast because you MUST use the software. This will change as time moves forward but Facebook is not a must. A new Zuckerberg could appear tomorrow and take every one of his users.

Peopel have been trying to do this to Gates for 20 years and it still hasn't worked!
If I was a betting man, The Google guys are the ones that will make Microsoft and Gates look like a mild success, not Facebook.

 

[Xeon]

What will it look like in 2025? The media's been going hard at demonizing FB. Will Zuck come out on top? Will users spend enough time on their platform? Will it still be an attractive advertising venue in 2025?

Maybe Bezos will buy and acquire Facebook, and together with that, Instagram and Whatsapp as well.

 

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[WheelsRCool]

WHEW!!!! Talk about some cash!!

http://news.aol.com/newsbloggers/20...rg-the-new-bill-gates/?ncid=NWS00010000000001

And take note of the part where Yahoo offered him $1 billion, which he turned down (!?!?!?!?!?!?!?!?!) to start a bidding war between Google and Microsoft, resulting in him now being worth $5 billion, on paper anyhow.

I sure hope he is smart enough to diversify his assets, otherwise a market downturn could erase all that wealth (one dude worth $10 billion during the dot-com ear went down to $100 million net worth during the bust).

 

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[CRBFL]

Yeah a read an article in the paper about it this morning. I was going to post it here, but I figured someone already had. That's a lot of money. It'll be interesting to see how this plays out.

 

[Peter2]

He is never going to be able to cash out anything close to that number.

 

[Yankees338]

He is never going to be able to cash out anything close to that number.

How so? Do you mean legally?

 

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[Peter2]

How so? Do you mean legally?

I'm pretty sure he is not even a millionaire. That valuation is just stupid fiction and will never translate in to real life. My guess is that they could get $3 billion for the company today, and that is waaaaaaaaaay to high for a company with that kind of revenue and profit.

Mark would get about $900 million of that. Not a bad amount, but far from $5 billion, however it could go the way of Friendster and be worth a fraction of these numbers very quickly.

 

[WheelsRCool]

$900 million, the poor guy....

What do you mean you don't think he is a millionaire though...?

 

[Peter2]

$900 million, the poor guy....

What do you mean you don't think he is a millionaire though...?

He is a millionaire on paper, but I don't think he has cashed out anything, so it's not like he could buy a $30 million home today.

 

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[CRBFL]

Social networking sites are unpredictable, so much of it is trend based. I think he is rather foolish for not taking the billion and running. But like I said it'll be interesting to see how it plays out.

 

[Yankees338]

I agree with you imirza. Also, advertising can be made even more valuable because of the information provided by users such as interests and geographical locations. I've been a user for over a year. In that time, I've seen the evolution from the simple, old-school style Facebook to the new Facebook. The new Facebook offers many new features including the ability to create applications which offer the opportunity for revenue right there. Additionally, advertisements have become increasingly more common. During this time, membership has continued to increase and I've seen no signs of things slowing down. It is very well run and organized; they've done nothing to shun people away.

 

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[Peter2]

Advertisers can reach out to 100s of millions of people via this social networking website.Think how much advertisers will pay for spots on FB. Imagine how much advertisers will pay to reach these people ?

Advertisers are not paying very much to advertise on FB, as evidenced by the very low revenue.

I have been online for 12 years and have seen plenty of HUGE things tank completely. There will soon be something else that is bigger and better than FB.

 

[Peter2]

That makes Zuckerberg worth 240M liquid and 15B illiquid.

Not even close. He does not own 100% of the company.

Either way, these type of sites are no different than night clubs. They are only popular for a short time until the next best thing is coming along.

 

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[Peter2]

Im not privy to his ownership stake, but I'm sure it was more than 50%.

He owns aprox. 30%.

 

[Russ H]

OK, let me start by saying that I'm a compleat idiot when it comes to net-based stuff.

I did happen to have a client whose company was bought by Nortel for 1M shares of Nortel.

This was during the great Nortel upswing. When I left for Paris and Budapest to study architecture for the opera house I was building on his property (no lie), Nortel was trading between 40 and 80 a share (I can't remember where it was).

He was holding onto the stock b/c in a few months, he'd be able to cash out at a much lower tax rate.

By the time I got back from Europe, Nortel was trading in the 20s, and just kept going south.

So I actually knew someone who was worth over $80M one year, and next to nothing the following year (when you have $80M, committing to $5-8M in debt is no big deal-- until your net worth slides down to $8M).

Great guy, BTW.

I don't think I would have handled it as well as he did. When I asked him why he rode it down, he said, "Because I was stupid. I played the markets for years, so I knew exactly what was happening. Problem was, I stopped playing by the rules I'd learned and started believing my own b*llsh*t".

As I said, quite a guy. I have no doubt he's on his way back up (this was 6 years ago).

MJ, from what I have read (very little, to be honest), here's how the math would go (somebody PLEASE tell me I'm wrong here-- PLEASE! ):

1. Mark Zuckerberg owns about 30 percent of the company (not sure if my sources are the same as Peter's-- prob not-- but that's the # I get).

2. From what I read, it's an Equity investment, not a cash deal. An equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises (Kinda like my Nortel guy). There may be some very specific rules/regs about anyone cashing out the stock options on this for months-- or even years. Again, I'm preaching to the choir here-- most of you know WAY more about this stuff than I do (I'm a RE guy-- I deal in *dirt* )

3. $240M * 30% = $72M in stock options (when he is able to liquify any of that, I don't know).

$72,000,000 in stock options is still pretty slick-- but it may hinge on Facebook performing at a certain level, or the options are reduced in kind or even pulled altogether (I could not find the particulars of the deal).

Microsoft is a smart company, with lots of assets/cash. As I see it, their buy in was not a valuation of the company as a whole (which is the $15B figure you see in all silly media pieces).

Since they were already huge advertisers on Facebook, this was a sweet deal for them. I'm sure it gives them some rights to ads or access to account info-- both worth big $$ to MS.

So how did I do? Do I have a cranium-rectal insertion? Or did I get the gist of it right?

-Russ H.

 

[FT1]

He owns 1/3, which means he just pocketed $80,000,000.00 cash, and has a net worth of $5 Billion, at age 23. If Facebook's value dropped by 2/3, he'd still be a billionaire. That dude is sitting pretty right now and i'm pretty sure he's not worrying about his billions being on paper.

 

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