Facebook flotation may make U2's Bono a billionaire
As Facebook prepares to go public, five key figures, including Bono and LinkedIn founder Reid Hoffman, are set to make billions.
The social networking company is poised to fire the starting gun on a flotation that's set to value the world's biggest social networking site at up to $100bn (£60bn).
The company that Mark Zuckerberg (below) founded in his room at Harvard University in 2004 is expected to file to sell shares to the public as soon as this week.
Bono is also the co-founder of investment firm Elevation Partners. Its stake in Facebook is almost certain to be valued at over $1bn when Facebook goes public. The star is likely to make as much from that process as U2 has earnt in its entire career.
The paperwork that Facebook will file with the US financial regulators should for the first time lift the lid on the finances of a company that has amassed 800m users in under a decade, courted controversy with its privacy policies and already had an Oscar-winning film made about it.
The IPO, which could see Facebook look to raise up to $10bn, will also provide a huge windfall for the Wall Street banks that are advising Mr Zuckerberg and the company's other senior executives.
Morgan Stanley, which helped bring networking site LinkedIn and online video game pioneer Zynga to market last year, is expected to have a lead role alongside Goldman Sachs. Fees are more than likely to run into hundreds of millions of dollars.
Although the IPO will deliver Mr Zuckerberg a paper profit of several billion dollars, going public will also provide several challenges for a company that has been happy to reshape the way people communicate online from the relative secrecy of its headquarters in Palo Alto, California.
Like the chief executives of numerous other public companies, Mr Zuckerberg will be under pressure to ensure that Facebook's quarterly results meet, or exceed, Wall Street's expectations.
The flotation will also put Facebook's efforts to turn users into cash under greater scrutiny than ever before.
While potential investors will be cheered as more and more corporations increase the pool of money they allocate to online advertising, and Facebook in particular, analysts say that it actually holds many threats for Facebook.
The pressure it will be under to lift advertising and other revenues needs to be weighed against the risk of deterring users.
This week, though, is likely to be swamped by the hype surrounding what should be the biggest technology flotation in history.
The other beneficiaries are:
- Sean Parker: Facebook's first president is credited with turning Mark Zuckerberg's project into a global business.
- Sheryl Sandberg: Currently chief operating officer, Sandberg was previously a vice president at Google and Chief of Staff at the US Treasury.
- Mark Pincus: Pincus is the co-founder of games company Zynga, whose games are played by 200m Facebook users. He is also an investor in Facebook.
- Reid Hoffman: The co-founder of LinkedIn was one of Facebook's very first investors.