The eve of what looks to be the largest technology IPO in the world is upon us. In just less than 12 hours, the world’s largest social network will certainly become even bigger after it goes public and raises a huge amount of capital–estimates have it being around $16 billion, 150% times larger than what was initially predicted. And to get people even more excited, today, Facebook shared with the world what they’ve been waiting for: its initial stock price. Starting at $38 per share, millions are expected to invest their money in the IPO in order to take their place in history as a shareholder in a momentous company. Some might think that the $38 price tag is pretty high for a startup, but not really. Looking back at search engine giant, Google, when they went public in 2004, the company priced their stock price at $85 and valued at more than double than what Facebook is currently valued. And each company has their own differences, which you can read about in this excellent Forbes piece. Nevertheless, the point here is that Facebook is probably the biggest thing to hit the public market since Google took it by storm eight years ago.
And now, we’re inching ever so close to that historical moment…when the company’s founder, Mark Zuckerberg, will take his place in history and ring the opening bell at the NASDAQ stock exchange from his office in Menlo Park, California, and watch not only his company enter a brand new era, but also see many of the employees at Facebook become instant millionaires. But has the thought of billions of dollars rolling through Facebook headquarters damaged any prospect of work at the company in the proverbial eleventh hour? Nope…because Mr. Zuckerberg and his troops have assembled at their offices for a hackathon. Yes, a hackathon–something that is rather typical in Silicon Valley and what many see as a way for Mr. Zuckerberg to demonstrate to soon-to-be investors that Facebook isn’t all about the money. No, it’s actually the way of life at Facebook. As VentureBeat explains, this all-night event is meant to reinforce their mantra that “Facebook’s focus will always be on building and shipping products.” The work at Facebook doesn’t stop just because people are going to see all their work come to fruition in less than twenty-four hours.
VentureBeat’s article includes a quote from Mr. Zuckerberg in a letter to investors:
The Hacker Way is an approach to building that involves continuous improvement and iteration…Hackers believe that something can always be better, and that nothing is ever complete. They just have to go fix it — often in the face of people who say it’s impossible or are content with the status quo.
For many people at the company, coming this far has been a long and tireless effort with a lot of blood, sweat, and tears. From endless nights toiling away at helping Facebook gain traction, seek out investments, survive controversy after controversy, lawsuits after lawsuits, and rolling out feature after feature that people constantly rebelled against, but mostly ultimately resigned themselves into having, the next 24 hours will be a wild roller coaster of emotions. Who knew that a single startup that came out of a Harvard dorm room would be able to catapult a young kid from relative obscurity into a technology superstar and cultural icon and helped shape a social network that looked to be no different than its predecessor MySpace into a networking and marketing powerhouse that it is today. Not only that, but it’s helped shape cultures, affect people’s behaviors, allowed folks to express themselves, and shape societies in ways no one practically expected.
How did this one social network succeed and become a normal part of society like it was our television, computer, automobile, cell phone, or any normal fixture in our lives, while the other social network “pioneers” faded away into relative niche obscurity or just wound up in disrepair? What did Facebook have that Friendster, Orkut, Bebo, MySpace, and all the others that have fallen to the wayside, have? Maybe because Mr. Zuckerberg and the social network just “got it” when all others didn’t? A quick query search on Quora leads to some interesting answers that make some sense:
- Facebook focused on real personal information & social connections
- Facebook developed more “sticky” features
- Facebook built a developer & technology platform
Whatever that “thing” was that caused Facebook to succeed, it has surely got them this far and up and it’s surely going to make some people very happy. According to CNBC, the company has seen some strong demand for shares since it announced its IPO–so strong, in fact, that brokerage companies were going to cease taking orders for shares as of two days ago. Of course, if you have enough cash and drive, you can certainly still pick up an order or two of stock at a few brokerage houses. And there’s definitely been a lot of buzz about the IPO–the company even amended their filing twice over the past 48 hours just to increase the size and price of the offering. While most people are estimating that Facebook will pull in $16 billion in their IPO, it could probably go as high as $18.4 billion and make it the second largest IPO in US history.
There will be plenty of folks who will see a tremendous windfall from the IPO tomorrow, including Mr. Zuckerberg. He alone stands to reap the biggest fortune at nearly $1.5 billion just from the IPO. Fellow co-founder Dustin Moskovitz is estimated to take $284 million while other investors will get a good chunk of change as well:
- Early stage investor Peter Thiel: $848 million
- Zynga’s Mark Pincus: $4.1 million
- Sean Parker: $38 million
- LinkedIn’s Reid Hoffman: $412 million
- Jim Breyer: $125 million
- Accel Partners: $2 billion
- DST Global: $2 billion
- Goldman Sachs: $1.25 billion
- Greylock Partners: $332 million
- Elevation Partners: $202 million
- Microsoft Corp: $287 million
Congratulations to the Facebook community for the incredible success that you’ve had over the years. It has definitely been a long trek over the past eight years and there’s an incredible amount of momentum pushing you forward. Here’s hoping that as the company turns the page and moves towards being a public one, the passion and the drive continues to be there and encourages the team to help build bigger and better programs and tools that companies and individuals can use to keep in touch with one another.
If you want to watch this historic moment online, NASDAQ’s website is scheduled to broadcast all the festivities live on Eastern Standard Time. VentureBeat reports that the festivities won’t be exclusive to Facebook and will be a normal part of the NASDAQ’s opening bell ceremony. It won’t probably be as glamorous as what you normally see due to Mr. Zuckerberg’s decision to stay at Facebook headquarters to ring the bell…it will most likely be all decorated like how Zynga did their IPO launch (see above). But set your alarm, folks, because it’s definitely going to happen tomorrow and it doesn’t matter where Mr. Zuckerberg is because in a few hours, history will be made. It all goes down at 9:29:15 in the morning on Friday, May 18.
Image Credit: “Trading Places”
Photo Credit: Facebook founder & CEO, Mark Zuckerberg, receives a standing ovation at Hackathon 31 on eve of historic IPO via Francis Luu/Facebook