Facebook’s IPO to generate hundred of millionaires

Facebook’s filing of $5 billion IPO last Wednesday generated a lot of buzz from investors and public alike. It is estimated that the IPO will value the company north of $75 billion. And as a result of this, hundred of employees from facebook will turn into instant millionaires and even some into billionaires like the company’s founder Mark Zuckerburg.

First of all, what is an IPO? An IPO or Initial Public Offering is a corporation’s first offer to sell stock to the public. An IPO raises cash, and usually a lot of it.

Facebook’s going public got investors excited because it is the largest on record for an Internet company. In fact it is five times the IPO of search engine operator Google. So for those employees who received stock options, it would mean that their personal wealth would turn into millions dollars.

Mark Zuckerburg, 27, would also join the ranks of the richest with a projected fortune of more than $20 billion. Early investor like Accel Partners who invested $12.2 million in 2005 is a big winner with as much as a thousand fold return on some of its investments. Peter Thiel’s investment of $500,000 in 2004 will be more or less worth $2 billion. Elevation Partner which is owned by Bono of U2 is also up for a big payday for investing $120 million in Facebook in 2010.

According to Alex Gould of Stanford Institute for Economic Policy Research, “Facebook will return insane amounts of money to the early stakeholders”.

Perhaps one of the most celebrated anticipated big winners of Facebook’s IPO is David Choe, the graffiti artist who painted the walls of the company’s first offices in Palo Alto in 2005. Instead of taking cash as payment, he opted on stocks which are now expected to be worth more than $200 million.pa

I wonder how the new Facebook millionaires will be spending their money. Cars, houses, jewelry? I just know Google’s advice: ‘Don’t be evil’.

Source: Yahoo! Finance

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