Sun, Dec 11, 2011 - Page 11 News List

Making a thousand millionaires

The Facebook IPO is expected to be the biggest in Silicon Valley history. Where will this flood of billions of Facebook dollars end up?

By Alexei Oreskovic and Sarah McBride  /  Reuters, SAN FRANCISCO

Facebook CEO Mark Zuckerberg gives his keynote address at the Facebook F8 Developers Conference in San Francisco, California, on Sept. 22.

Photo: Reuters

Traveling to space or embarking on an expedition to excavate lost Mayan ruins are normally the stuff of adventure novels, but for employees of Facebook, these and other lavish dreams are moving closer to reality as the world’s No. 1 online social network prepares for a blockbuster initial public offering (IPO) that could create at least a thousand millionaires.

The most anticipated stock market debut of next year is expected to value Facebook at as much as US$100 billion, which would top just about any of Silicon Valley’s most celebrated coming-out parties, from Netscape Communications to Google.

While weak financial markets could postpone or downsize any IPO, even the most conservative market-watchers say Facebook seems destined to set a new benchmark in a region famous for minting fortunes, with even the rank-and-file employees reaping millions of dollars.

Facebook employees past and present are already hatching plans on how to spend their anticipated new wealth, even as securities regulations typically prevent employee stock options from being cashed in until after a six-month lock-up period.

“There’s been discussions of sort of bucket list ideas that people are putting together of things they always wanted to do and now we’ll be able to do it,” said one former employee who joined Facebook in 2005, shortly after it was founded.

He is looking into booking a trip to space that would cost US$200,000 or more with Virgin Galactic or one of the other companies working on future space tourism. That’s chump change when he expects his shares in Facebook to be worth about US$50 million.

“If that IPO bell happens, then I will definitely put money down,” said the person, who declined to be identified because he did not want to draw attention to his financial status, given the antiglitz ethos of many people in Silicon Valley.

“It’s been a childhood dream,” he said of space travel.

Others are thinking less science fiction and more Indiana Jones. A group of current and former Facebook workers has begun laying the groundwork for an expedition to Mexico that sounds more suited to characters from the Steven Spielberg film Raiders of the Lost Ark than to the computer geeks famously portrayed in the movie about Facebook, The Social Network.

Initially, the group wanted to organize its own jungle expedition to excavate a relatively untouched site of Mayan ruins, according to people familiar with the matter who also did not want to court notoriety by being identified in this story. After some debate earlier this year, they are now looking at partnering with an existing archeological program.

Founded in a Harvard University dorm room in 2004 by Mark Zuckerberg and his friends, Facebook has grown into the world’s biggest social network with more than 800 million members and revenue of US$1.6 billion in the first half of this year.

Information about its ownership structure or employee compensation packages is hard to come by, since the still-private company discloses very little. Facebook declined to comment for this story.

It is clear that Facebook’s earliest employees, who were given ownership stakes, and early venture capital investors — such as Accel Partners, Greylock Partners and Paypal co-founder Peter Thiel — will see the biggest paydays.

And Zuckerberg, 27, is estimated to own a little more than one-fifth of the company, according to The Facebook Effect author, David Kirkpatrick.

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