U2’s Bono Could Lose Millions Due to Declining Facebook Stock
It’s amazing to see how some things can take a complete 180 degree turn. After news spread that U2 vocalist Bono may have become the richest musician in the world with his initial Facebook investment, it is now being reported that he could lose hundreds of millions of dollars due to the social networking site failing to meet expectations during its initial public offering (IPO).
British mag NME has crunched down the numbers on what Bono could potentially lose. When Facebook launched its IPO on May 18, 2.5 billion shares were going for $38 each. The singer holds 2.3 percent of the company’s total shares through his private equity firm, Elevation Partners. That equaled out to 57.5 million shares worth $2.19 billion dollars, hence the discussions about Bono overtaking Sir Paul McCartney as the richest musician in the world.
However, as most early investors found, things didn’t go quite as planned. Facebook shares stumbled right out of the block since its IPO over a week ago. After peaking at just $0.23 higher than the initial $38-a-share on its first day, shares plummeted to $31.91 last Friday (May 25) at close, according to the Associated Press. This has caused investors to file lawsuits against Facebook and its main underwriting bank Morgan Stanley for being misled about the company’s earnings potential.
This leaves Bono’s stake through Elevations Partner at $1.83 billion, losing roughly $342 million dollars. He has remained adamant that he wouldn’t be topping the richest rock stars list any time soon. “Contrary to reports, I’m not a billionaire or going to be richer than any Beatle — and not just in the sense of money, by the way, the Beatles are untouchable. Those billionaire reports are a joke,” he said.