Facebook to let employees sell some stock — at internal $4 billion valuation
venturebeat.com
venturebeat.com
I wonder what this does to their runway?
But as mentioned below, maybe this is achieved by direct trading between employees or investors.
1- source of contact - substitutes include: old aol, aim, email, ichat, ect
2- representation of self to world - substitutes include myspace, most social networks, ect
asian markets have different preferences for representation of self than those facebook emphasizes.
facebook is having troubling scaling globally AND they plan to monetize on only advertising.
those employees made out nicely.
Until I actually saw some innovative advertising method making advertisers money and getting an excited response in that community, I'd be sceptical that they can do more with a pageview then NYT.com or About.com or any other 'site.'
At banner ad monetisation rates, that would probably put them at around the $50m - $500m p/y mark.
This seems in between an IPO and an acquisition, it would be nice to see more startups taking this route.
Of course, very few startups find themselves in this position anyway, being worth billions but with no interest in selling at the moment.
They'd have (I assume) a good few employees with $1/2m - $1m or even $50 - $100k worth of stock. For many, it's probably more then everything else they own put together. You wouldn't want to put everything you own on one risky & speculative tech stock. They'd be pretty keen on an IPO. I guess letting them cash out a bit is a way of releasing some of that pressure so they can keep taking risk.
The preferred stock deal with MSFT values the company at $15b 'internal valuation' that the shares were issued at is $4b. Aren't these supposed to be approximations of the same thing, roughly?
Does that means that they can't go public with a valuation lower then $15b?
That MSFT deal seems insane. Facebook would have to be an advertising powerhouse.
I could be wrong. But I think that's a believable story, especially in light of this news around FB's own (much lower) internal valuation.
But wouldn't they have something written into the deal that they can't sell the company at a valuation lower then the preferred stock price? Isn't that what preferred stock means.
I suppose that there would be no restrictions on buying at a lower valuation.
Exactly how do they plan to let employees sell stock without accidentally becoming a public company?
Is this stock being sold back to the company itself?
doubtful. this is not a new practice. banks and investment houses have been buying options in private companies from potential shareholders for years
Where would the money come from? Very few facebook employees are rich in cash.
they sell it to banks and/or investment firms who are basically buying a futures contract on a facebook ipo. the employee loses their rights to sell these shares, the bank gains the rights.