Facebook's IPO will create over 1,000 millionaires

Facebook's IPO will create over 1,000 millionaires

Summary: With Facebook's initial public offering (IPO) expected for next year, many are wondering what this means for the employees. Over 1,000 of them are expected to become millionaires.

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Facebook is planning an initial public offering (IPO) for next year, meaning the company will go public in Q1 2012, Q2 2012, or even later, depending on which rumor and sources you want to believe. Assuming the social networking giant raises the expected $10 billion or so, giving it a valuation of around $100 billion (give or take a few pennies), it will create more than 1,000 new millionaires.

Reuters interviewed a few Facebook employees to find out what they were planning to do with their riches. One answer was to pay $200,000 (of an expected $50 million payout) to travel to space. Another was to embark on an expedition to excavate lost Mayan ruins. Many will likely retire, some will go try to build their own startups, and a few will go fund other startups.

Zuckerberg has frequently stated, both publicly and privately, that he is against the idea of rushing the company into an IPO. Just last month, the young CEO said there is still no expected timeframe for his company's IPO. He's worried, like many company founders before him, that he'll lose key employees to a simple obstacle that plagues everyone: greed.

Some whispers say he wants to wait until next September or later in order to keep employees focused on product developments. Some workers are supposedly keen to cash out in an IPO, but their boss wants to keep them around through next summer in order to complete certain feature rollouts.

Facebook doesn't need to push for an IPO because it really doesn't need the money right now. The advantage of staying private is focus: you don't have to worry about investor phone calls or show up at investor conferences. On the other hand, the company may be motivated to hurry up the process in order to increase employee compensation. Early last year, Facebook put curbs on employees' ability to sell their company shares privately to other investors. To stop employees from quitting the social networking giant in order to monetize their shares, the company needs to go public so employees can sell their stock on the open market at various times during the year and cash in on their holdings.

In short, a Facebook IPO is coming: the company restructuring around privacy and communication this week was no accident. The news implies it is actually coming sooner rather than later, but then again, delays aren't out of the question.

See also:

Topics: Social Enterprise, Banking, Legal

Emil Protalinski

About Emil Protalinski

Emil is a freelance journalist writing for CNET and ZDNet. Over the years,
he has covered the tech industry for multiple publications, including Ars
Technica, Neowin, and TechSpot.

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5 comments
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  • Yeah right .....

    None of the investors will make enough to reach a million (if anything they will lose millions) and the only one who will benefit are the top dogs at Facebook.

    Anybody dumb enough to invest on a company with ZERO long term capabilities deserves to lose all his money. Facebook already reached the saturation point and is already in a down spiral to becoming last year's FAD. By the end of 2013, Facebook will be where MySpace is today.
    wackoae
    • RE: Facebook's IPO will create over 1,000 millionaires

      @wackoae

      Naw, won't happen. For one, it has succeeded in becoming part of our culture, where MySpace failed. And I say that as a non-FB user.

      Second, they've amassed one of the largest consumer relational databases in the world. From a Data Warehouse and Data Mart perspective, the sheer # of records and their relations are worth many fortunes... They could shutdown their website tomorrow and survive on database marketing services alone.
      UrNotPayingAttention
  • RE: Facebook's IPO will create over 1,000 millionaires

    Alright ! More millionaires to pay for the lazy, dirty scumbags who don't want to work for a living. You know who, the occupying Litter of WallStreet. Yeaaahhhhh !!
    zedbula
  • RE: Facebook's IPO will create over 1,000 millionaires

    Alright ! More millionaires to pay for the lazy, dirty scumbags who don't want to work for a living. You know who, the occupying Litter of WallStreet. Yeaaahhhhh !!
    zedbula
  • RE: Facebook's IPO will create over 1,000 millionaires

    I don't think Zuckerbird is paying his fair share - just ask President Husein, he'll tell you.
    zedbula