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> So the relatively modest investment of $6.5M snowballs into a $20 billion creation of “wealth” I don't understand. What's this $20bn number? Where did that c
by retube 15y ago
> So the relatively modest investment of $6.5M snowballs into a $20 billion creation of “wealth”
I don't understand. What's this $20bn number? Where did that come come? They bought 0.01% for $6.5m. Unless the stock has traded again at a higher valuation, the paper value of their stake is still $6.5m. And... so what?
- michael_dorfman 15y agoThe paper value of their stake is still 6.5M. The paper value of Facebook as a whole (the market cap) is now 20B higher than it was prior to that trade, if you take that share price as the new share value, which is what Forbes did, and what 37signals objects to.
- retube 15y agoAh ok got it, cheers.
- thematt 15y agoThat's the increase in the value of everybody else's stake. Since the stock traded at a higher valuation, they're presuming that increases the value of all the other shares too.
- ianl 15y agoThe last financing round valued Facebook at $50B, and now with this latest buy in of $6.5M it increased the valuation to $70B. That is where the $20B figure is originates.