It would make sense if Meagan Marks sat glued to some digital stock ticker, watching every twitch in Facebook shares on this first day of public trading in what is the largest technology IPO in history. Marks is a former Facebook employee, and a shareholder. And like every current shareholder, she has a huge incentive to see Facebook's stock price march upward. But instead of gazing at dollars and decimals, Marks is watching the wind, hoping it picks up enough to go kite surfing with her friends.
There is a lot of misguided focus on which Facebook employees and investors are amassing what size pile of money, Marks says. "What this IPO is really about is the company now has more money to go out and make more acquisitions and build more interesting products."
Marks, who joined Facebook in early 2006 and left almost four years later to become an angel investor and adviser to other startups, acknowledges the importance of this day for her and her Facebook peers financially. “But I keep forgetting it’s happening,” she says. “It’s surreal, an IPO was never what we were working toward. This IPO is not a lifetime moment for me -- when we launched News Feed and the Facebook Platform, those were major lifetime moments.”
Talk to enough Facebook employees, current and former, and you'll get a similar take on this moment in the company’s history. Yes, the financial windfall is spectacular, but don’t mistake this IPO for the endgame. If it were, the person who always stood the most to gain, Mark Zuckerberg, would have sold his company to Microsoft or any one of a number of other potential suitors long ago. There is a lot more Zuckerberg and his team want to accomplish. And if you are at all interested in Facebook the stock, that is very good news.
At a valuation of $100-plus billion, Facebook shares are already priced to perfection given what Facebook offers today and the 900 million users it has. If you agree that it is unlikely that Facebook can amass a significant number of new users in the near-term, then for the stock to appreciate Facebook needs to make more money from the users it does have. Pull that off, and Facebook shares go through the roof. Fail to do so, and Facebook shares could languish in some stock market purgatory.
Watch what the hedge fund managers do, says one Silicon Valley VC who already has shares in Facebook through a private transaction. “Most of the people I know in the hedge fund world aren’t touching it yet,” he says. “They wouldn’t short it (bet it goes down), but there are other companies out there with much bigger upsides. Look, I already own the shares, and I’m not buying more.”
What could change his investing stance is if Facebook were to start zeroing-in on ways to get money out of those who access Facebook on their smartphones. “The growth for Facebook is coming from international users, and most of those are mobile users,” he says. “Facebook has no idea how to monetize mobile yet, and it could be a very long time before they do. But if they do, that would be the breakthrough they need to raise their valuation significantly.”
Marks would agree, she just says it differently. “This success, this IPO, it’s a testament to not worrying about exit strategies,” she says. “It was never when, or how do we exit? It was always focusing on building great products.”
Right on cue, the wind picks up and Marks heads off to launch her kite. “You’ll have to let me know what happens in the markets,” she says, as she gathers up her board and heads toward the water. “I’m not going to be watching it.”
