U2 frontman will leap over Paul McCartney after social network floatation
Bono‘s stake in Facebook is about to make him the richest rock star on the planet when the company floats on the stock exchange.
The U2 singer owns 1.5 per cent of the shares in Facebook through his private equity firm, Elevation Partners. Under current valuations, when the social networking site floats on the stock exchange later this year, Bono’s shares will be worth just under $1 billion (£630 million).
Bono’s firm invested in Facebook in 2009, paying around $90 million (£56 million) for its shares.
The development means Bono could be worth, on paper at least, as much as $1.1 billion (£695 million), some $300 million (£189 million) richer than the current most-wealthy rock star, Sir Paul McCartney.
Bono shouldn’t expect to be able to go on a huge shopping spree straight away. He can’t sell his shares all at once and risk the valuation plummeting, while the actual value of each share can rise or fall instantaneously from day to day. Part of the money, when released, is expected to go to some of Bono’s charity projects, most of which focused on humanitarian aid in Africa.
When Bono and Elevation Partners made the purchase, the financial media were largely skeptical of the investment because of Facebook’s unexploited position as a money-maker. Elevation weren’t always so astute, either. Other investments at the time included Forbes Media, Palm, and Move.com.
Forbes’ value dropped seven fold in the three years of their investment, while a $100 million investment in Move.com resulted in a 50 per cent loss. Elevation only recovered their investment in Palm when the technology company was sold to Hewlett Packard.