Will you make Mark Zuckerberg rich?
Stated differently: Will you invest in Facebook? The third-largest IPO in history begins today. Facebook set a price of $38 share, which values the social network at about $104 billion. Twenty-eight year-old cofounder and CEO Mark Zuckerberg will be super wealthy, if Facebook gets its price (and likely much more) as I post ahead of the market's open.
Facebook makes available 421.2 million shares. Zuckerberg maintains voting majority, 503.6 million, which at $38 is $19.1 billion, making him the 29th richest person -- wealthier than Google's cofounders.
I wouldn't buy Facebook, even if I could. I can't for conflict-of-interest reasons. Investing in companies we cover is taboo. I go further, owning no stocks whatsoever. Too bad, as Apple looked like a real bargain to me in 2003. Will you buy Facebook? The stock symbol is "FB", by the way, as trading opens.
Facebook is one of the most profound success stories of the Internet era, along with Google. College students founded companies that transformed societies all without the typical barriers that often stifle innovation. Facebook shows the Web can be the great equalizer.
Harvard law professor Lawrence Lessig makes the point in his review of movie "The Social Network". He uses Nantucket Nectars, founded by Tom First and Tom Scott, as vehicle for comparing the old and new worlds of starting a business in Massachusetts:
After graduating from Brown in 1989, they started a delivery service to boats on Nantucket Sound. During their first winter, they invented a juice drink. People liked their juice. Slowly, it dawned on First and Scott that maybe there was a business here. Nantucket Nectars was born. The two Toms started the long slog of getting distribution. Ocean Spray bought the company. It later sold the business to Cadbury Schweppes.
At each step after the first, along the way to giving their customers what they wanted, the two Toms had to ask permission from someone. They needed permission from a manufacturer to get into his plant. Permission from a distributor to get into her network. And permission from stores to get before the customer…
Zuckerberg faced no such barrier. For less than $1,000, he could get his idea onto the Internet. He needed no permission from the network provider. He needed no clearance from Harvard to offer it to Harvard students. Neither with Yale, or Princeton, or Stanford. Nor with every other community he invited in. Because the platform of the Internet is open and free, or in the language of the day, because it is a ‘neutral network,’ a billion Mark Zuckerbergs have the opportunity to invent for the platform.
Zuckerberg still isn't asking permission, as he seeks to rewrite societal attitudes about privacy. This not asking defines the social network and its disruptive nature.
Facebook is just eight years old, not even six open to anyone. I joined on Sept. 30, 2006 -- not that I have used it that much over the years. How about you? When did you join? But the most recent redesigns, including the Timeline, have me more interested in the social network, even as I spend much more time on Google+. Facebook is growing, maturing, and from that perspective is ripe for today's IPO.
But as Facebook is a disruptive force, it faces another. The IPO will change Facebook. Zuckerberg will no longer be able to do what he wants -- to act without asking permission. Even with controlling share, Facebook is a public company with all the pressures (and regulations) that brings. The social network is beholden to investors now and the quarterly pressures that come with it.
That's the price Zuckerberg pays for going public -- the risk he takes for the rewards.