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Most liked posts in thread: Twenty-Three Year-Old Facebook Founder worth $5 billion

  1. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    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.
     
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  2. BookwormMitch
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    BookwormMitch Silver Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    If you have any predictions for the future I’m all ears, incredibly accurate prediction.
     
  3. Scot
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    Scot Ductus Exemplo Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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

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    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.
     
  5. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I thought I did a good job of hedging my bets throughout the entire thread... :)
     
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  6. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    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.

    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.
     
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  7. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    $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.
     
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    CRBFL New Contributor

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  9. GPM
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    GPM Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    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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  10. JunkBoxJoey_JBJ
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    JunkBoxJoey_JBJ Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER

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

    Time flies.
     
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  11. JunkBoxJoey_JBJ
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    JunkBoxJoey_JBJ Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER

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    And last comment was really in 2013, so oddly enough here we are again, “again”.
     
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  12. jasoncuellar123
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    jasoncuellar123 I’m probably awake. Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    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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  13. MJ DeMarco
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    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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  14. Andrew
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    Andrew Contributor

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    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.
     
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  15. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    First, if you take a look at some of the posts above, you'll see that he likely hasn't pocketed anything...the infusion of cash was into the company, not any existing shareholders (at least based on the public information released).

    Second, the $15B valuation is meaningless. If I were to sell .00000001% of my company to you for $1000, that would give my company a $100B valuation. And by the same reasoning you use above, I'd be worth $50B (since I own 50% of my company). But, since there is little reason to believe that I could sell the other 99.99999999% of my company for the same amount, it really is meaningless.

    Likewise, Facebook most probably couldn't find another company(s) to purchase the other $14.76B of it's stock anytime soon (do you think they could?).

    By the way, it's also important to note that when you use the phrase, "on paper," it implies an unrealized gain. In the case of an investment valuation without any true financial backing (like in this case where we have a $15B valuation without $15B actually existing), there is no realized or unrealized gain.

    So, even saying he's a billionaire "on paper" would be incorrect.

    At best, since he controls about 1/3 of the $240M investment, he has $80M "on paper."
     
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  16. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Just to clarify for anyone else who may still be confused...

    Starting from the beginning, and speculating in some cases since there's no way of knowing if this deal may have deviated from standard operating procedures (it may have):

    - The founders of Facebook create a corporate entity (a "C" Corporation) to hold their asset (the business)

    - The corporation issues shares of stock (this is done on paper, and there are likely multiple "classes" of stock issued)

    - The founders grant themselves some percentage of the Class A stock (the kind that gives voting rights, etc)

    - The founders probably granted themselves somewhere between 50-80% of the company stock, with the rest going into a pool used for other equity needs (employee stock options, investment rounds, etc)

    - The corporation appoints a Board of Directors, who likely have control over the major financial aspects of the company (allocating stock, granting more stock, etc)

    - As the company hires employees, they give the employees stock options out of this additional pool (likely Class B shares, without voting rights, etc). Every options grant must be approved by the BOD, and the founders likely no-longer have final say over approval of equity distribution

    - Microsoft comes along and wants a piece of the pie. After a lot of negotiations, they all agree that MS will buy 1.6% of the company for a total of $240M

    - The Facebook BOD approves the private equity investment, and allows 1.6% of the company stock to be distributed for the $240M investment

    - The company now has $240M in its bank account (or however Facebook and MS agree to deal with the cash), and MS now has 1.6% of the Facebook stock. Depending in whether MS got Class A or Class B shares (or potentially a whole different class of shares), they may or may not have voting rights, veto rights, etc

    - The $240M is now subject to the same financial rules and regulations as any other money in the company, meaning it's likely that any major expenditures must go through the BOD

    - This means that the founders can't just sell off their shares in return for a portion of this money, unless they either get BOD approval or its already addressed in the company by-laws

    - This means that the founders are likely no more liquid than they were two days ago, and while they are potentially worth $80M "on paper," it's very possible that they could never see any of this money unless/until there is a real liquidity event

    - In fact, I'm guessing that Facebook has already laid out for MS what the money will be used for and how it will be spent (there may even have been agreements signed)

    - Lastly, this is not considered a liquidity event for the company (based on any definitions I'm familiar with), as it's likely the only shares purchased by MS were previously unallocated and controlled by the Facebook BOD (i.e., no-one made any money other than the company itself)

    Now that I think about it, it's likely not a taxable event for the company, as investment funds aren't taxable going in...only coming out...I think...others would know the tax stuff much better than I... :)

    By the way, the above is just speculation, but as I've now been part of two acquisitions by MS (including a recent one that was about 4x the size of the Facebook investment), I'm guessing it's along these lines...
     
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  17. piranha526
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    piranha526 Contributor

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    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.
     
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  18. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    It depends on a lot of things. First, the terms of the deal. In some cases, stock is distributed all at once (in which case you can do anything you want with it); in other cases, stock is distributed over a period of time, or after certain business milestones are set. In my experience, it's generally distributed all at once, and you can do whatever you want with it, with the following caveat:

    Depending on the percentage ownership you have in the buying company, whether the buying company is public or not, and whether you have material knowledge of the business, you may be susceptible to specific SEC regulations that determine if/when you are allowed to sell your shares.

    Other than that, it's a personal decision between you and your accountant on whether you'd rather have the stock or the cash.

    Generally, yes. Though these types of deals could be structured in a lot of different ways, and "cash" may not necessarily mean cash. Though often times it does.

    The basic financial stuff you can learn from books. How these things work in real life generally comes from experience. I've been in the tech industry in Silicon Valley (big companies, startups, and in-between) for 10 years now, and it's just one of those things that you end up being part of -- or knowing people who are -- so often, that you eventually learn how things tend to work.

    Well, I can't speak for people *that* wealthy, but speaking for those in the $1-20M range, most of it is generally invested, and not straight cash. Investments may be as safe as t-bills or bonds, but invested nonetheless. Additionally, for a lot of people in this bracket, a decent percentage of their money is likely in real estate. The rest is in the market (diversified), with an emergency cash fund as well.

    Of course, your mileage may vary...

    Again, cash doesn't necessarily mean cash (or maybe to Donald it does). It generally just means a relatively safe, fairly liquid investment like t-bills or bonds.

    The smart ones hire a good accountant. The dumb ones hire a bankruptcy attorney.
     
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  19. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    He was completely non-descript, and you probably wouldn't have noticed him in the crowd. In fact, I would have described him as a typical PhD (though he wasn't working on his PhD at the time)...

    I agree with your assessment of FB vs. Windows. But, I think you'd be surprised how many people feel the opposite way these days (they could live without Windows but not without FB)...
     
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  20. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Same could be said of Yahoo! and Amazon.com back in 1999. Now you're probably saying "What's Yahoo! and Amazon.com?"

    Oh wait...

    My point is, making a random comparison of FB to Geocities (or Y! or Amazon.com) is meaningless. If you really believe FB won't be around in 10 years, let's hear a well-thought-out analysis of why you believe that.

    Do you know something about FB management that leads you to believe they aren't smart enough to keep their business relevant? Do you know something about the business model that leads you to believe it will fail at some point? Do you know something about the customers that indicate that will migrate away at some point?

    I know quite a bit about FB (including a number of senior employees), and even I have no idea where they'll be in 10 years (and have yet to hear any convincing arguments one way or another).
     
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  21. Xeon
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    Xeon All Cars Kneel Before Pagani. Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    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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  22. Xeon
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    Xeon All Cars Kneel Before Pagani. Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Maybe Bezos will buy and acquire Facebook, and together with that, Instagram and Whatsapp as well.
     
    Last edited: Feb 11, 2019
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  23. CRBFL
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    CRBFL New Contributor

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    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.
     
  24. Peter2
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    Peter2 Fastane Legend. RIP.

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    He is never going to be able to cash out anything close to that number.
     
  25. Yankees338
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    Yankees338 Bronze Contributor

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    How so? Do you mean legally?
     

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