Bono shrugs off Facebook billionaire claims

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U2 frontman Bono has laughed off claims he will become a billionaire on the back of the Facebook flotation that netted co-creator Mark Zuckerberg more than a billion US dollars.

RTE News

U2 frontman Bono has laughed off claims he will become a billionaire on the back of the Facebook flotation that netted co-creator Mark Zuckerberg more than a billion US dollars.

The rock star's investment group Elevation put money into the social networking site, taking 2.3% of the company in late 2009.

But while the flotation means Elevation is worth way in excess of £1bn, Bono is joined by nine other directors who stand to profit.

He said: "Contrary to reports, I'm not a billionaire or going to be richer than any Beatle - and not just in the sense of money, by the way, the Beatles are untouchable - those billionaire reports are a joke."

There had been suggestions that the canny investment could make his wealth outstrip that of Sir Paul McCartney, said to be valued at £665m.

Yesterday's initial public offering of Facebook shares on the Nasdaq Stock Market was one of the biggest ever US stock market flotations.

But despite the hype, shares in the company closed up just $0.23 cents on their first day of trading after being priced at $38 each.

It made the site worth about $105bn - more than, McDonalds, Hewlett-Packard and Cisco.

By the end of the day, more than 500 million shares had changed hands.

Nick Einhorn, an analyst with IPO advisory firm Renaissance Capital, said: "It wasn't quite as exciting as it could have been but I don't think we should view it as a failure."

The IPO did not help the US markets, with the Europe debt crisis weighing on investors.

The Dow Jones lost 73 points, which means it has ended lower on 12 of the last 13 days, while the Standard & Poor's 500 and the Nasdaq were both down as well.

Mr Zuckerberg, who sold about 30 million shares, will retain a large stake in the company, making him worth an estimated $19.1bn US dollars - the 23rd richest person in the world at the age of 28.

He said: "Right now this all seems like a big deal. Going public is an important milestone in our history.

"But here's the thing - our mission isn't to be a public company. Our mission is to make the world more open and connected."

One thousand millionaires were expected to be created by the flotation, including a small number of the 400 Dublin-based staff and the sale of 421 million Facebook shares is thought to have netted up to $18.4bn for the company.

James Hughes, chief market analyst at Alpari UK, said: "The real value of Facebook is not likely to be known until the hype of the IPO has died away and investors have been able to digest how the company is going to evolve to be the money making machine many expect it to be."

Before the IPO, many said they believed the stock was overvalued.

In a recent Bloomberg survey of 1,250 global investors, analysts and traders, 79% said Facebook's valuation was not justified and only 7% deemed the valuation fair.

The company's laid-back management style that sees Zuckerberg wear his trademark hoodie and sandals may also have to change now the company is accountable to shareholders.

Facebook is the latest in a series of online firms to sell shares to the public in recent months, following online voucher firm Groupon in November and online games maker Zynga in December.

© RTÉ 2012-RTÉ Commercial Enterprises Ltd

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This page contains a single entry by Jonathan published on May 20, 2012 6:23 AM.

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