A Tiny Group Will Become Hugely Rich from Facebook Money
The three guys up there—the co-founders of WhatsApp and their investor—just made billions and billions of dollars. The photo was taken right after they sealed the deal. Smile! But even the people without any power at the company will walk away with possibly hundreds of millions of dollars.
Forbes reported some details from behind the scenes of the mammoth buyout, which will heap $19 billion in cash and Facebook stock upon WhatsApp's roughly 50 employees. That's a very tiny group for an incomprehensible amount of money.
Jan Koum and Brian Acton, who started WhatsApp, are instant billionaires. But according to Forbes, the staffers who joined the company sooner than later have a 1% stake in the company, which Business Insider calculates should be worth about $160 million. That's $160 million per employee. Even a significantly smaller bite of equity would make you a hefty millionaire.
And of course, that's excluding the extra $3 billion in Facebook stock that employees will receive if they hang around the company for four years, which would push these early hires even further into mega-millionaire status, confined within the small walls of a relatively tiny company. As Berkeley's Robert Reich points out, this is an extreme concentration of wealth in the hands of very, very few, at a company that generates virtually no money of its own:
The winners here are truly big winners. WhatsApp's fifty-five employees are now enormously rich. Its two founders are now billionaires. And the partners of the venture capital firm that financed it have also reaped a fortune.
And the rest of us? We're winners in the sense that we have an even more efficient way to connect with each other.
But we're not getting more jobs.
Twitter, which minted 1,600 new millionaires when it went public, looks downright populist by comparison.
Photo via Forbes