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Comment by fleitz | Hacker News Reader

90% of value is created post-IPO, 10,000 shares of MSFT stock in 1983 when they IPO'd is now worth $100 million.

Companies used to IPO a lot earlier than they do now, because of the regulatory drag associated with being public.

Most of todays internet tech companies don't have the shelf life of Microsoft. Many will be has-beens in 10 years time (or even 5!). So you want to take the cash upfront.

(Disclaimer: Not a real survey.) Doing a spot-check of big tech IPOs in 2004 (first post-crash year with a significant number), there do seem to be pretty inconsistent outcomes.

Big IPOs that year: Google, DreamWorks Animation, InPhonic, Shopping.com, SalesForce.com, Atheros, PortalPlayer, Shanda.

Of those, Google, DreamWorks Animation, SalesForce.com, and Shanda continue to be successful. Shopping.com was acquired by eBay within a year at a modest premium over the IPO price (15%), and Atheros was acquired by Qualcomm after 7 years, for about 3x the IPO price (also around 15% annual return). PortalPlayer was acquired by Nvidia after 3 years for 20% below the IPO price (and 45% below the first-day closing price). InPhonic went bankrupt after 3 years.

And most companies don't have a big IPO, let alone a big IPO and a long shelf life. Money up front.

Most of the companies back then didn't have that kind of shelf life either. Making an investment in an early stage company is inherently risky.

If your goal is to get rich via investment opportunities I would not recommend trying to win the stock option lottery via the employee option pool as the best strategy to achieve that goal.

For that to be true for Facebook they would have to end up at $1 trillion valuation.

It would be worthwhile to factor in inflation to this. I could actually see that happening in 20-30 years if they manage to survive that long.

Considering how fast Washington prints money that will happen and properly soon.

Depends if Facebook is the main way to socialize for the next century. Imagine having that much data on that many people and owning that channel! That's worth a lot of money.

Yes, considering the previous Facebook didn't nearly last as long. I'm thinking that social networks don't have nearly as high of a shelf life than you think.

In my mind, that's the big gamble with Facebook. It could either be THE source for socializing for 100 years (and hence very valuable), or it could be another MySpace (etc.), and hence not worth a lot.

The cynic in me, would say that people who own stock now don't think it would last and are getting out when it's at it's top.

Not even the entire Bell system would be worth $1 trillion today, and unlike Facebook, people actually had to use the Bell system, it wasn't just a source of idle entertainment.

When it comes to investing though you invest in a management team and not a product. The rate of change is increasing, all the products on the market today will be well and truly obsolete in a few years, even the market opportunities themselves could change

It's things like Facebook putting 'the hacker way' into their DNA and being able to retain top talent that makes the company worth anything. If you took the facebook source code and all their customers away they'd probably have a pretty good chance of making something else that's quite good. Today anyway, but if tomorrow they can't it'll be because they somehow lost their way and let the MBA's in. Kodak had a great place in the market but they just couldn't successfully adapt

I haven't looked at the price but if I was in the USA I'd probably buy some shares, the google float of $100 seemed outrageous at the time, and unless they get further involved with Microsoft I'm pretty bullish that they'll keep going up

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