Months after Bono finished a 3-year tour that grossed a record $736 million, the U2 singer is set to capitalize on one of the biggest stock IPOs in U.S history.
Bono is managing director and co-founder at Elevation Partners, an investment firm that focuses on media, entertainment and technology industries. (The firm's investment team also includes former Apple EVP and CFO Fred Anderson and Bret Pearlman, a former senior managing director of the Blackstone Group.) Elevation has invested millions in Facebook through private market transactions and, like other shareholders, stands to make a great return on investment.
How much money will Elevation make on Facebook? That depends on the cost basis of the stock. According to reports, Elevation acquired $120 million of Facebook shares in June 2010. At the time Reuters reported that $120 million investment valued Facebook at $23 billion and mentioned an earlier investment of $90 million at a $9 billion valuation. There may have been one another investment as some reports have claimed Elevation has three separate investments in Facebook totaling $270 million.
Elevation should do very well if its investments valued Facebook in the range of $9 billion to $23 billion. Facebook's IPO filing seeks to raise $5 billion at valuation up to $100 billion. If Elevation unloads it shares at a $100 billion valuation, it will more than triple its latest investment (which valued Facebook at $23 billion) and get a 11x return on its $90 million investment.
Facebook is the big payday in Elevation's portfolio. The company invested $460 million in struggling device maker Palm and earned a reported $25 million after Hewlett-Packard's $1.2 billion acquisition of the company in 2010. Elevation has put $100 million into local reviews website Yelp and recently invested $32 million in media analytics company MarketShare. It also owns a stake in business media giant Forbes.