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Bono's Facebook stake worth nearly $1bn
http://www.guardian.co.uk/business/...a-ocarroll/2011/aug/16/u2-bono-facebook-stake
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Elevation Partners' stake is now valued at $975m - more than four times the $210m it paid in November 2009
U2 frontman Bono's investment firm could be looking at a profit of almost $800m on its stake in Facebook, it has emerged.
The social networking site has just been valued at an eye-popping $65bn - up from $50bn in January - following the sale of a stake by advertising and marketing giant Interpublic Group.
Interpublic was an early investor in Facebook and has just sold half of its 0.4% share in the group for $133m (£81m), valuing the site at more than $65bn.
This values the U2's Elevation Partners' stake at $975m - more than four times the $210m it paid in November 2009.
Interpublic Group chief executive Michael Roth said an "attractive opportunity" to sell some of the stake had presented itself and it "made sense" to do so.
IPG did not reveal the number of shares it is selling but said that the sell-off would see a pre-tax gain of about $132m.
Facebook is now one of Elevation's stellar investments. When it bought the stock - which is difficult to get hold of - the company was hot but worth a relatively "meagre" $9bn.
In June last year it was worth $23bn and by December last year Goldman Sachs, which canvassed its wealthy private clients about a possible investment opportunity, had valued it at $50bn.
So it looks like Elevation Partners got stuck in quite a profitable moment.
Earlier this year Forbes named U2 as one of the world's highest paid musicians, having taken $736m - and profits of around $195m - from record sales and concert receipts over the last two years.
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http://www.smh.com.au/technology/bi...e-hope-for-the-rest-of-us-20110818-1iyyu.html
U2 frontman Bono's investment firm has made a profit of almost $US800 million on shares in Facebook in just a few years, but average punters looking to get in before the social network goes public should keep dreaming.
Bono's investment firm Elevation Partners - named after one of U2's famous songs - bought a $US210 million stake in Facebook in November 2009. That stake is now worth $US975 million - a more than fourfold increase.
It's a nice earner for Bono, who has been derided as the worst investor in America after losing hundreds of millions investing in Forbes Media, owner of Forbes magazine. Elevation also invested almost $US500 million in smartphone maker Palm just as it was being relegated to irrelevance by competitors like Apple, but ended up gettings its money back when Palm was sold to Hewlett-Packard.
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Serial Australian entrepreneur and investor Matt Barrie, who is currently chief executive of Freelancer.com, was straight to the point when asked how the average punter could buy into Facebook on the secondary market: "you can't".
But many others have got rich from Facebook shares, as outlined on the Who owns Facebook? website.
On its most recent valuation, Facebook has grown by $US15 billion in January to be worth about $US65 billion. Just last June Facebook was worth $US23 billion.
The $US65 billion valuation was determined after one of Facebook's early investors, Interpublic, recently sold half of its 0.4 per cent share in the social networking site for $US133 million.
But given that Facebook, which now has 750 million users, is a private company, it is difficult for smaller investors to get in. Facebook is widely expected to be preparing for a $US100 billion initial public offering (IPO) next year.
Employees in private tech companies have begun cashing in their shares by using exchange services like SharesPost and SecondMarket.
These aren't regulated or monitored to anywhere near the same extent as public share markets but have allowed employees and early investors to cash out some of their holdings while giving other cashed up investors the chance to get in before the IPO.
Barrie said to invest in Facebook on sites like SecondMarket or SharesPost you needed to be "qualified as a sophisticated or professional investor" with about $US2.5 million in net tangible assets or $250,000 annual income over the last three years "for a start".
"Secondly they are using second market to consolidate the investor base by buying up employee stock, as there are rules in the US about once you have 500 investors you are basically forced to go public," he said.
"So unless you want to buy hundreds of millions you are out of luck. Most private tech companies have rights of first refusal as well so even if you found someone willing to sell to you, you'd be rejected."
Some Goldman Sachs employees attempted to bypass the 500 investor limit by joining in on a $US1.5 billion Goldman Sachs "special purpose vehicle" created specifically to invest in Facebook.
The US Securities and Exchange Commission is investigating the trading of shares in hot private companies like Facebook and Twitter on secondary markets. There are concerns that the markets may breach trading rules and that significantly fluctuating valuations could cause smaller investors to get burnt.
Vivek Wadhwa, senior research associate at Harvard Law School, recently wrote in The Washington Post that the secondary markets "have the potential to generate fraud on an Enron-like scale" and represent "a serious threat to the culture of innovation that made Silicon Valley great".
"There are basically no rules, no real disclosure and minimal registration of issues. Welcome to the Wild, Wild West," he wrote.
"We do need to provide a better way for technology company founders and investors to exit after they have achieved success. But does this have to be by selling stock to uninformed investors?"
