Facebook IPO: Bono's big score

After a string of unsuccessful investments, the rock star finally got it right.

By MSN Money Partner May 18, 2012 11:00AM

By Maeghan Ouimet

 

IncU2 front man Bono finally has found what he's looking for -- at least when it comes to tech investments.

 

The rock star is a cofounder of the investment fund Elevation Partners, which owns 1.5% of Facebook (FB), a stake that could be worth $1.5 billion following the social network's upcoming initial public offering. That's a considerable reversal of fortune for someone once called "the worst investor" in America, thanks to some highly embarrassing misfires.

 

Founded in 2004 by Bono and a host of Silicon Valley bigwigs -- including Silver Lake Partners founder Roger McNamee, Apple (AAPL) board member Fred Anderson, and Electronic Arts (EA) CEO John Riccitiello -- Elevation's stated mission was "to help media and entertainment businesses develop and market great content." In 2006, the fund made its first big investment: $300 million in Forbes Magazine. The property's value dropped 80% over the next 12 months.

 

In 2007, Elevation invested a reported $460 million for 25% of the device manufacturer Palm. Shortly after, Palm was acquired by HP (HPQ) for $1.2 billion, leaving Elevation with a measly 1.5% return. Elevation also invested $100 million into the online review site Yelp (YELP), which has since been plagued with class-action lawsuits and extortion accusations.

 

In 2010, Elevation Partners made the first of three investments in Facebook. By 2011, the firm invested a total of $270 million into the social media giant, and, was sitting pretty in anticipation of the company's public offering. Apart from Elevation, Bono participated in a $250 million second-round investment in the document sharing start-up Dropbox.

 

Bono was introduced to the Silicon Valley elite by Facebook COO Sheryl Sandberg. Before joining the social network, Sandberg worked at the U.S. Treasury Department, where she successfully enticed Bono to assist in the agency's aid initiatives in Africa. Bono is just one of many celebrities taking a turn in the tech investment world over the past few years. Lady Gaga and Kanye West both backed turntable.fm, Leonardo DiCaprio is a funder of social media platform mobli, and Ashton Kutcher has thrown money towards Foursquare, Flipboard, Milk, and Airbnb among others.

 

Regardless of where Bono and Elevation Partners go from here, one thing is for certain: the star's involvement in Facebook will make him the richest rock star in the world, dwarfing the current title owner: Sir Paul McCartney.

 

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20Comments
May 18, 2012 11:59AM
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Oh god, short-lived success for Bono...hopefully he'll get out quick...not much value in a blow up facebook advertisement place. Facebook will become a passing fad...especially when people start turning inward to privacy as the world undergoes financial rocking and the police state become apparent. quiet lives are better than open book lives...facebook will fad
May 18, 2012 1:32PM
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Bono's not greedy - far from it. He invests like most people and sometimes he earns, sometimes he loses. This 'windfall' as many of you put it will not change him or his family. If you know anything about the Hewsons you'd appreciate that they are a family grounded in faith and are not prone to excesses like most others in the entertainment business. Bono and U2 have worked their butts off for the last 30 years building their business and deserve every penny they've earned. Who cares if Bono uses his celebrity to shed light on issues close to his heart? He doesn't ask us for money, but to lend our voices to fight for those orphans and widows in extreme poverty we otherwise wouldn't notice.Is that a crime? He gets this reputation as a no good do-gooder and I think that says more about the blight of the person criticizing him than it does about the real Paul Hewson who is a gifted songwriter and musician doing what he can to give back to God "for all the blessings He has poured out on [him]."
May 18, 2012 2:57PM
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Bono is one of the biggest egomaniacs in the industry. Yeah, it's great to help with charity and other worthwhile causes, but he seems to do it for attention to feed his ego. I agree with what Disco s-cks said about his donations. With all of the money he's made, why does he need to beg people to make donations for these causes when he could fund them all on his own? I'm tired of the rich trying to separate us from our money to do things they want when they could finance these things largely on their own. Mr Billionaire needs to dig into his own pockets and quit trying to get into those of us hard working/taxpaying suckers.
May 18, 2012 2:44PM
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He's not greedy, no.  He probably already has a multicast million pound bank account , certainly more money than he could spend in a lifetime and now seeks to increase to billions.  People don't invest if they have no interest in money.  If that ain't greed I don't know what is.   His street cred now hits zero, he's as bad as the wall street suits embezzling millions out of ordinary working people....and please don't tell me he is going to donate it all to charity. Scumbag
May 18, 2012 11:53AM
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Bono, not wanting to pay any taxes in his homeland Ireland, took all his billions and billions out of Ireland and hid it overseas. He thinks those poor Irish beggars should starve. Thats his money. And he is a Democrat.
May 18, 2012 1:11PM
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Adding up all his previous investment losses, looks like Bono just broke even with FB.
May 18, 2012 12:04PM
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Just how much money do you really need to live? When is enough enough?

Good god, if he lived to be 1,000 he wouldn't go through all his assets.

Personally, I think extreme greed is as much a psycological problem as extreme

shopping. It's fills some kind of void in a person.

May 18, 2012 12:52PM
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So let me get this straight, its OK with the OWS idiots that some hollyweirdo / Singer makes big bucks but some businessman that works his or her **** off is bad for the " people " I say OWS needs to look a little closer at who they are protesting.
May 18, 2012 3:07PM
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Also wanted to add that Bono partnering up with John Riccitiello is a match made in greedy scumbag heaven. He is to the video game industry what Mark Zuckerberg is to social media. A greedy, arrogant piece of dog waste who needs to be shot. I hope all 3 of them rot in Hell. Tell Saddam and Hitler hello for me fellas!
May 18, 2012 2:53PM
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Unbelievable...How does such an otherwise good and well-meaning guy get sucked into the New World Order to such a magnitude? Who "handled" him?
May 18, 2012 12:09PM
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Is Bono a partner on his own, or with the other members of U2?

'Cause if it's the latter, better divide that windfall by 5.

May 18, 2012 12:59PM
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I wish that arrogant gas bag douche would lose everything. He always asks for donations to his causes. He brags about what he donates. It sounds like a lot of money to us working people, but to him it is a drop in the bucket. Why don't he donate as much as he invests on all his investments. It doesn't seem to bother him to lose hundreds of millions on bad investments, so why don't he invest that much to worthwhile causes and charities. BECAUSE HE IS A LOUD MOUTH ARROGANT SELF CENTERED PIECE OF ****!!!
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