Facebook IPO: Bono's big score
After a string of unsuccessful investments, the rock star finally got it right.
By Maeghan Ouimet
U2 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.
More from INC.com
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.
'Cause if it's the latter, better divide that windfall by 5.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Start investing in technology companies with help from financial writers and experts who know the industry best. Learn what to look for in a technology company to make the right investment decisions.
Hotels and restaurants are increasingly fighting back against negative online reviews -- by suing the writers. So be careful how you phrase your disgust with that disappointing dinner.
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'