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In Facebook Deal, Board Was All But Out of Picture

online.wsj.com

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Re: In Facebook Deal, Board Was All But Out of Picture

#41

Post by namenotrequired »

AVTizzle wrote: post #13

Interesting. Kind of touches close to a thought I had when I first heard about the deal... Board aside, what kind of signal did the acquisition send to Facebook's rank-and-file? There's plenty of extremely talented people who joined the party too late to have any significant options. Now everywhere they go (including home, private, and social lives...) they can't escape hearing about the gold mine that was just dropp…

Yeah, i don't usually read papers but on the few occasions i did, that week, it was hard to escape :D

Re: In Facebook Deal, Board Was All But Out of Picture

#42

Post by pge »

URSpider94 wrote: post #33
nikcub wrote: post #21

Earlier quoted context omitted.

that makes the IRR a crazy 1.33x10^3175% [1] funny that they would only need to let their investment ride into equivalent investments for another 21 days before reaching a return of 209 Trillion dollars, which is in excess of the total value of all stocks, bonds and currency in the world. [1] http://www.wolframalpha.com/input/?i=%3D+%281+billion+-+500+...

Odd as it may seem, this is not necessarily great for the VC's. Most VC funds only get to invest each dollar once; when it gets cashed out after an IPO or M&A event, the returns go back to the investors. I'm not sure if this money still counts as being under management for purposes of their 2% annual commission; if not, then it's almost certainly a bad deal.

Many funds have provisions for recycling (ie calling a given dollar twice instead of just once) that address cases like this that are quick flips.

One other note - for the first five years of a fund (typically), the 2 percent fee is calculated on committed capital not invested capital, so an event like this has no impact.

Re: In Facebook Deal, Board Was All But Out of Picture

#43

Post by smackfu »

nikcub wrote: post #21
CaveTech wrote: post #16

Earlier quoted context omitted.

Yes, the round closed the day before the acquisition, iirc.

that makes the IRR a crazy 1.33x10^3175% [1] funny that they would only need to let their investment ride into equivalent investments for another 21 days before reaching a return of 209 Trillion dollars, which is in excess of the total value of all stocks, bonds and currency in the world. [1] http://www.wolframalpha.com/input/?i=%3D+%281+billion+-+500+...

I don't think they can sell the Facebook shares yet, so I don't know if that calculation is correct.

Re: In Facebook Deal, Board Was All But Out of Picture

#44

Post by smackfu »

ealexhudson wrote: post #20

I would really be surprised if this didn't affect the IPO. Why would people put money into a business with corporate governance this poor?

The IPO structures the company so Zuckerberg has ultimate control anyways. He has 28% of the class B shares (which are 10x the votes of the class A shares being sold in the IPO).

Re: In Facebook Deal, Board Was All But Out of Picture

#45

Post by dasil003 »

stevelochan wrote: post #34
dasil003 wrote: post #30

Earlier quoted context omitted.

Zuckerberg obviously doesn't give a shit what public investors think, and rightly so. You can't lead a world-changing company in growth stage by kowtowing to what "the market" thinks. Instead he will do what he thinks is best for Facebook, and if it works, the stock price will go up, if it doesn't, it will go down.

post-IPO, if he simply "does what he thinks is best" without board approval and the stock price goes down, he'll get sued by shareholders

Who said anything about "without board approval"?

Re: In Facebook Deal, Board Was All But Out of Picture

#47

Post by stfu »

Horace wrote: post #7

Well, this has been evident for a long time. Mark Zuckerberg intends to rule Facebook, not by consensus, but by himself. When Zuckerberg was forced to make an IPO, he did everything in his power to minimize outside control. I also believe(not sure about this), that Zuckerberg still retains majority control of the company.

Have to admit that this increases my respect for Zuck. It breaks with the current trend towards this consensus seeking, "collaborative" management ideal, that sabotages bold moves.

Re: In Facebook Deal, Board Was All But Out of Picture

#49

Post by Aissen »

mrgreenfur wrote: post #48

It's amazing that the Instagram guys started negotiations at $2B. I guess when you're talking to FB you just pick a huge number out of the air. Why not $5B?

It's in the article (see google cache). They were about to be valued at $500M in the next round of investment, during the next week. Zuck had to move fast, and he did. He bought them 2 times the supposed valuation, which is probably what Instagram expected.

(PS: Negotiation 101, start with a number 2x bigger than what you expect)

Re: In Facebook Deal, Board Was All But Out of Picture

#50

Post by Djehngo »

guelo wrote: post #35
SomeCallMeTim wrote: post #15

Earlier quoted context omitted.

Doesn't work for me; WSJ must have shut it down. Though Google cache pulled through, at least for now: http://bit.ly/IIBabu

WSJ seems to have made a recent change to stop the old search-for-the-title-in-google trick. If you visit the article first and then leave and come back with google referers it doesn't work anymore. But if you've never visited the article and you come from google it does show it. Even when you delete your cookies and then try to come via google it won't show the article. That means they're using flash cookies or some…

Incognito mode in chrome seems to evade whatever form of tracking they are using.
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