Facebook Creates a New Millionaire’s Club…And a Few Billionaires Too
By Morgan Korn | Daily Ticker
The millionaire's club has to make room for a few more hundred people...at least.
Facebook filed to go public on Wednesday and many current and former employees are expecting huge paydays. The public offering could value the social media titan between $75 billion to $100 billion and for those employees who received stock options, their personal worth could equal several hundred million dollars.
Facebook Co-Founder Mark Zuckerberg, 27, is slated to become one of the richest people in the world with a personal fortune of at least $28 billion. His salary will be cut to $1 from $1.48 million last year, effective Jan. 1, 2013.
Facebook Chief Operating Officer Sheryl Sandberg, who made $30.8 million last year, will enter the billionaire's club for the first time and early Facebook investors like Peter Thiel and venture capital firm Accel Partners are both expected to net profits in the billions.
Even Facebook's biggest foes - Tyler and Cameron Winklevoss - will become richer, thanks to the 1.2 million shares they own, part of the settlement deal they agreed to after suing Zuckerberg for stealing their idea. (Have you seen The Social Network?) Zuckerberg dropped out of Harvard to concentrate on expanding Facebook, which he started with a few friends in his sophomore college dormitory eight years ago. Facebook has 845 million users worldwide.
The New York Times profiled graffiti artist David Choe as one example of how Facebook's public offering will change the lives of thousands of people. Choe was hired to paint murals on the walls of Facebook's Palo Alto office in 2005; instead of taking cash as payment, he accepted several hundred stock options. Those shares could be now worth north of $200 million.
Zuckerberg's father Edward, a dentist in New York, will also greatly benefit from the IPO. He was given two million shares "in satisfaction of funds provided for our initial working capital," according to Facebook's S-1 filing.
One person left out of the Facebook filing is estranged Co-Founder Eduardo Saverin. Zuckerberg's former best friend and roommate, and the one who provided the company's early financing, Salverin has sold a majority of his stake (worth five percent) of the company on the secondary market.
Business Insider's Nicholas Carlson joined The Daily Ticker's Aaron Task to discuss the Facebook IPO and how the newly-minted Facebook millionaires will be spending their money. Google's IPO in 2004 made many people rich, but Facebook's public offering takes it to another level.
"It's a monument to capitalism," Carlson says. "A thousand millionaires overnight."