Wizards of bullshit: How Forbes turned $6.5 million into $20 billion

Re:Wizards of bullshit: How Forbes turned $6.5 million into ... by retube on Wednesday June 29, 2011 @10:27AM (#2709570)

> So the relatively modest investment of $6.5M snowballs into a $20 billion creation of “wealth”

I don't understand. What's this $20bn number? Where did that come come? They bought 0.01% for $6.5m. Unless the stock has traded again at a higher valuation, the paper value of their stake is still $6.5m. And... so what?

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Re:Wizards of bullshit: How Forbes turned $6.5 million into ... by michael_dorfman on Wednesday June 29, 2011 @10:33AM (#2709590)

The paper value of their stake is still 6.5M. The paper value of Facebook as a whole (the market cap) is now 20B higher than it was prior to that trade, if you take that share price as the new share value, which is what Forbes did, and what 37signals objects to.

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Re:Wizards of bullshit: How Forbes turned $6.5 million into ... by retube on Wednesday June 29, 2011 @10:35AM (#2709600)

Ah ok got it, cheers.

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Re:Wizards of bullshit: How Forbes turned $6.5 million into ... by ianl on Wednesday June 29, 2011 @10:33AM (#2709592)

The last financing round valued Facebook at $50B, and now with this latest buy in of $6.5M it increased the valuation to $70B. That is where the $20B figure is originates.

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Re:Wizards of bullshit: How Forbes turned $6.5 million into ... by thematt on Wednesday June 29, 2011 @10:33AM (#2709591)

That's the increase in the value of everybody else's stake. Since the stock traded at a higher valuation, they're presuming that increases the value of all the other shares too.

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