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How Many Millionaires Will Facebook’s IPO Create?

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Justin Sullivan, Getty Images

Facebook’s IPO has created a buzz rarely seen since the dot-com era in the late 1990s. In fact, some analysts are saying it will create “1,000 overnight millionaires.” But is it true?

The claim first appeared in a Reuters article in December, and the news organization partly attributes the figure to a former in-house recruiter for Facebook who said “there will be thousands of millionaires” — a figure has since been repeated ad nauseum.

If the 1,000 number is true, then each of the company’s 700 employees (reported in 2008), as well as hundreds of other employees and investors, have shares worth at least $1 million or more.

However, since most of the monetary windfall will go to the co-founders and the big venture-capital investors, and the projected share amounts and values were based on 2009 numbers, employees with short tenures might not fare nearly as well. For example, managers hired last year were getting as few as 2,000 shares — meaning the IPO could net them only $80,000.

In addition, even those who become millionaires on paper won’t be able to sell the stock until next year — when it could be worth far less.

Still, there’s no doubt Facebook’s IPO will make some people very, very rich. It’s just a matter of exactly how many new millionaires there will be.

[MSN]

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