21 Gems of Facebook's S-1 That Will Boggle Your Mind
By now, you've probably seen all the (impressive) basics about Facebook's S-1 filing. The company made $3.7 billion in 2011, saw yearly revenue growth of 88 percent, has 845 million users (about 12 percent of the world's population), blah, blah, blah.
But upon closer inspection, the S-1 reveals some pretty insane facts about the company. Here's what people are actually going to be talking about on the social network's road to IPO:
- Zuckerberg and Sheryl Sanderberg, the company's COO, are allowed to use company money to fly in private jets. Perks abound for family members too: "On certain occasions, Mr. Zuckerberg may be accompanied by family members or others when using private aircraft."
- Jamie Dimon, CEO of JPMorgan Chase, is possibly the only person in financial services whose reputation was actually enhanced by the financial crisis of 2008. Now the JPMorgan side of the business, never a tech powerhouse, has snagged the number two slot co-managing the Facebook IPO.
- "Facebook was built to accomplish a social mission." Just as Google, upon its IPO, enunciated its goal as "Don't be evil," Facebook also claims a higher mission. Wall Street doesn't. This can lead to problems.
- Mark Zuckerberg still has 57 percent of the voting rights of his company.
- The float. Facebook is only selling 5 percent of the company. Most start-ups would be scared to do that, for fear they'd be caught in a short-squeeze. But the Facebook offering is so big that Zuckerberg can't be worried. The choice of underwriters shows Facebook also isn't terribly worried about impressing institutional shareholders.
- So many people wanted to read Facebook's offering documents that the U.S. Securities and Exchange Commission website crashed.
- The company is embroiled in tons of lawsuits. "We are involved in numerous class action lawsuits...and, if resolved adversely, could harm our business," notes the S-1.
- The company has nearly $4 billion in cash...just sitting in the bank.
- The graffiti artist David Choe, who took stock in place of cash for painting murals on the Facebook office walls six years ago, is expected to be "worth upward of $200 million when Facebook stock trades publicly."
- There were more than 100 billion friend connections on Facebook as of December 31, 2011.
- Sheryl Sandberg, with 1,899,986 shares of Facebook common stock, and 39,321,041 options, will be worth nearly $2 billion, making her one of the wealthiest women in the world. Some said Facebook was cheating her by not offering her a board seat. Ha.
- Zynga, the social gaming company, accounted for 12 percent of Facebook's annual revenues in 2011.
- In 2013, Zuckerberg will take a $1 annual salary.
- The IPO could make magnate-slash-investor Peter Thiel (also know as a Seasteading advocate and artificial-intelligence aficionado who last year paid 20 students to drop out of college and start companies) about $2 billion (based on an initial $500,000 investment).
- Yuri Milner, the Russian billionaire, owns roughly a 7 percent stake in the company.
- Facebook co-founder Dustin Moskovitz, who is now an angel investor, owns 7.6 percent of the company, putting his net worth around $6.7 billion.
- Bono, the U2 frontman, paid $120 million for company stocks in 2010 to own about 1.5 percent of the company. After the company goes public, he could see his investment rise to over $1 billion.
- The lock-up. After an IPO, company insiders are generally prohibited from selling shares for 180 days. So they can't just dump their shares into the IPO. Facebook insiders are looking to get liquid much faster—their lock-up lasts only 90 days. Thank SecondMarket for that.
- Zuckerberg gets his own security detail—or whatever a "Comprehensive Security Program" to "Protect Mark Zuckerberg" means.
- Mr. Zuckerberg's father, a dentist living in New York, was given two million shares of stock "in satisfaction of funds provided for our initial working capital."
- Zuckerberg has retained the right to choose his successor after his death.