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article imageFacebook IPO to create over 1,000 millionaires — But then what?

By Leigh Goessl     Dec 10, 2011 in Business
Palo Alto - In financial circles and across the web, for a long while now much chatter and speculation has been geared towards Facebook filing for an initial public offering (IPO).
At this point and time, it seems an IPO is not a matter of 'if', but 'when' the social network giant will file with the U.S. Securities and Exchange Commission.
The valuation estimates of Facebook when it does go on the open trade market keep going up. In January 2011, estimates jumped up to $50 billion, however current expectations are aligning with a figure closer to $100 billion.
According to Reuters, when Facebook does file for an IPO, it will create "at least a thousand millionaires." This will top any others from the Silicon Valley who ultimately went public, including the mighty Google Inc.
Worth the wait
This means that not only the earliest members of Facebook will see the riches, but others as well, being Facebook has had "generous use of equity-based compensation in past years," according to people familiar with Facebook. Saying, even estimating conservatively, over a thousand individuals are "looking at million-dollar-plus paydays" after the IPO happens. The company still offers options, however has scaled back in recent times.
Reuters reported, "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 had joined Facebook in 2005, shortly after it was founded.
Adventures include booking a trip to outer space, either with Virgin Galactic or another company developing space tourism. The cost for this type of vacation is about $200,000, but that's small potatoes when an individual's Facebook shares are expected to be worth a cool $50 million.
"If that IPO bell happens, then I will definitely put money down," said the person, who opted not to be identified in print according to Reuters. "It's been a childhood dream," he said of space travel.
Some individuals are looking for more earthly adventures along the lines of partnering with an archeological program and excavating ancient Mayan ruins. Yet others are looking to pay off student debt, buy homes or new cars. The local economy is anticipating some boosting regardless of how the money is spent.
Fly high, crash and burn?
As expectations for a Facebook IPO remain high, there are some volatile factors, such as the unpredictable nature of the stock market, human nature, and let us not forget the explosive nature of the Internet itself. Trends change fast, and Facebook has been riding high for a while. Competitors come and go quickly in the technology industry, and it is not uncommon for one company to be eclipsed by another. Don't forget the once powerful AOL and mighty MySpace toppled and sailed almost into oblivion when compared with the glory each company previously enjoyed when it came to market share.
Groupon was another recently highly anticipated IPO. Currently the flame for this smoldering company is burning hot and cold, with very recent drops below its initial IPO offering. While stock value has since crept back up and is again trading above the initial price, the future may not be certain. Groupon competitor, Living Social, was looking at IPO, however has now delayed the filing and has "shifted plans after other Internet companies faced turbulent debuts in the public markets."
Could the same happen to Facebook? Hard to say, although many experts are figuring Facebook is "destined to set a new benchmark" for the Silicon Valley. It is likely to be a long while before any viable social network competitor rises to come close to Facebook's 800 billion members, however once the company goes public, the internal dynamics will have to change which will play a factor.
A progressive future
Whatever happens, those who hit the ground running with Facebook in the early years will most undoubtedly see a nice ROI, enough to perhaps leave the company and create their own startup. With over a thousand new millionaires, all sorts of new upstarts could be spawned by Facebook's IPO, creating tomorrow's hottest progressive technologies.
At this point the future is uncertain, however one thing is for sure, those who were in Facebook early on are anticipating a handsome return for their efforts and investments.
And some of them may literally give new meaning to the adage of sailing 'over the moon' if they fulfill their dreams to travel to space.
As of late, Facebook is rather mum on its intentions where IPO is concerned. So what happens next? Chances are the rest of us will find out sometime in the next several months.
More about facebook IPO, facecook, Social Networking, Millionaires, Technology
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