January 23, 2012
Following a few run-ins with a Russian stripper stalker at their Shrader Street home, Mark Pincus and family recently moved to a more secure building within San Francisco. Today, the Pincus owned 1572 Shrader Street officially hit the market listed for $2,189,000.
According to public records, Mark Pincus paid $2,850,000 for the contemporarily remodeled home hidden behind a modest facade in the heights of Cole Valley back in 2005.
While the 2005 sale doesn’t appear to have been completely arms-length with Pincus acquiring the property from a partner, the 2012 sale of 1572 Shrader was and closed escrow on Friday with a reported contract price of $1,890,000 ($657 per square foot).
The house at 3855 Washington Street which is also Pincus owned, but was never Pincus occupied, remains on the market and listed for $8,900,000 having been purchased by the Pincus family for $8,100,000 in 2009 and then remodeled (including an all new master suite, seismic work and security).
∙ The Shrader Street Home From Which Mark Pincus Was Driven [SocketSite]
∙ A Pincus House (But Never A Pincus Home) [ScocketSite]
First Published: January 23, 2012 7:30 AM
Comments from "Plugged In" Readers
Didn't quite make the million dollar loss club!
I know, he can easily absorb the loss (unlike many other peak buyers) and I know the 2005 purchase was not arm's length. But believe me, realtors were touting the "comp" back then. $650/sf is not quite as exciting as $1000/sf, except to buyers in the market.
Posted by: A.T. at January 23, 2012 10:03 AM
"But believe me, realtors were touting the "comp" back then."
No, they weren't. They wouldn't have known about it.
Posted by: [anon.ed] at January 23, 2012 10:16 AM
Is it zeenga, zainga, or zehnga?
Posted by: sf at January 23, 2012 10:29 AM
Lie much, A.T.?
Considering the '05 sale was a completely off-market, non-arm's length transaction nobody knew about it. Feel free to provide a single piece of evidence from anywhere that this sale was ever promoted as a comp, k thx.
Posted by: Agent415 at January 23, 2012 10:31 AM
I assume they recorded the transaction into public records?
You know, the kind that anyone can check any time they want to?
Posted by: tipster at January 23, 2012 10:37 AM
Wow. I feel as if a door has been cracked. You two guys think the whole world is as presented on this particular blog. Now I begin to understand.
OK then Tipster. Explain how realtors were touting it. What, they, and a plural was used, THEY had a hunch that that house changed hands? So THEY did a title search, and THEY touted it during the last market? Really. That's your only argument.
Good grief. "Trust me," the guy said. And instead of distancing yourself, you join in? Bad call, bro.
Not as if this buffoonery merits my words on what might or might not have actually been touted during that market, but only 14 sales have ever gone for 2.8M or higher in this particular area. And only one such sale occurred during '05. It was 185 Edgewood, an altogether different class of property, which went for 3.175M. That's the property realtors would have been touting at that time. And by its yardstick, certainly 1572 Shrader would have looked sub 2M.
Posted by: [anon.ed] at January 23, 2012 10:50 AM
Uhhh, right tipster. Agents just pour through tax records all day - for all 350,000+ housing units in the City hoping to find a bizarre non-arms length transaction in which the numbers look totally off and then make a postcard out of it. Of which none of you can find a shred of evidence of, but it just sorta happened.
Right... anyhoo, how's the LaRouche volunteering going? This your year? lol
Posted by: Agent415 at January 23, 2012 10:51 AM
Where did they end up buying?
Posted by: Marina Boy at January 23, 2012 10:56 AM
Um, you don't need to "pour" [sic] through tax records all day. All sorts of public web sites show all the sales in an area, including those not on the MLS, with data collected from public sources. Takes about 30 seconds. Right, realtors just somehow had no idea about this $1000/sf sale and never mentioned it!
Regardless, $657/sf for this extremely nice place in a great neighborhood is quite a discount from a few years ago.
Posted by: A.T. at January 23, 2012 11:07 AM
While I have no idea if agents were using the sale as a comp, certainly the sale was VISIBLE to anyone looking at common websites like Redfin, etc.
Posted by: NJ at January 23, 2012 11:15 AM
^ Yeah, even that is b.s. That sort of websites didn't even exist in 2005. Zillow for example, which is the forerunner, launched in 2006. Honestly, you guys are a riot.
Posted by: [anon.ed] at January 23, 2012 11:19 AM
(Didn't mean to aim that @ you, NJ.)
Posted by: [anon.ed] at January 23, 2012 11:23 AM
A.T. - how completely owned are you getting here, lol?
Just stop. You made a bs claim, you clearly couldn't back it up, you got called on it, and now your whining.
Like Anon said, which you conveniently ignored, if Realtors wanted high dollar comps at that time they could have used actual comps. Not the in-house, off market, asset swap among business partners.
Posted by: Agent415 at January 23, 2012 11:27 AM
Um, flujie, even accepting that, zillow in 2006 would have readily shown the 2005 transaction . . .
And non-mls are generally pooh-poohed by the realtors here for being lower than market sale prices. Since that does not support the party line here, I guess the new argument (at least until the logic changes again) is that off-MLS sales are now higher than market prices.
Posted by: A.T. at January 23, 2012 11:28 AM
wow. still talking. incredible.
Posted by: [anon.ed] at January 23, 2012 11:35 AM
Agent415: "Considering the '05 sale was a completely off-market, non-arm's length transaction nobody knew about it."
How did that bold declaration turn out?
Posted by: A.T. at January 23, 2012 11:41 AM
@anon.ed / Agent415
Having been a real estate agent for several years, before and after 2005, I can assure you it was trivially easy to pull tax records. It's part of most MLS software (I wasn't an agent in SF, but I'd be surpripsed if that functionality was missing).
I personally did it every time I did a CMA, so I could give an accurate representation to a potential seller or buyer of the current market. There's much less information available, but the sale price was almost always included. You also looked incompetent if the seller asked about his neighbor's off MLS sale and you didn't know anything about it.
Agents frequently also use the tax information for prospecting for new clients as it contains the owner's name, mailing address, and often phone number.
In summary tax information was easily available from a variety of sources at that time and unlikely that agents didn't know about the sale, although they probably didn't know every detail of it.
Posted by: lyqwyd at January 23, 2012 12:14 PM
This home would have been an outlier and most any knowledgeable agent would have seen it as such. It doesn't matter either way as what agents 'tout' has no bearing on the markets as a whole. The 2012 sale price is much more relevant. I'm sure the new homeowner will appreciate this thread when convincing the tax collector why their new basis is much lower.
I think 3855 would sell quickly if offered at a similar discount
Posted by: eddy at January 23, 2012 12:28 PM
Actually, the MLS didn't pull up tax data back in 2005. The Realist licensing deal that the SFARMLS signed is pretty recent. Brokerages had individual tax-search software in '05. Regardless, non-arms length is not a comp. And providing a qualified illustration of what likely happened in an outlier transaction is not touting.
Posted by: [anon.ed] at January 23, 2012 12:40 PM
"Regardless, non-arms length is not a comp"
agreed, but that doesn't mean it wasn't used as one.
Posted by: lyqwyd at January 23, 2012 12:50 PM
how would anything have been useful as a comp with prospective buyers without pictures and some indication of quality of finishes and layout?
I love how some threads talk about how lazy all realtors are and then this one has them inventing websites and databases that didn't exist yet (property shark, zillow, redfin) and touring houses that were never listed or marketed in any way.
Posted by: steve at January 23, 2012 1:28 PM
The back and forth used to be somewhat entertaining but now is getting a bit old. Although it is still somewhat amusing how offended the realtor community gets at a couple of random forum posts vs the massive efforts of the Bureau of Misinformation (the NAR).
Posted by: ugh at January 23, 2012 11:15 PM
It's actually sad. Tip used to have a few useful insights but lately he's just to devolved into useless troll drivel. Maybe he is conflicted if his business catering to tech firms is doing well? Who knows. Not much better from the rest but hard to blame agent provocateurs for taking a stand. At least they are clear and concise with their opinions. The constant needling tactics on here certainly take their t(r)oll. Still the Editor keep this place alive so as long as you know what your stepping into its a great forum. It bothers me that the most likely audience is probably not a regular reader so they get a biased / skewed / misleading perspective on almost every post. Less Plugged In; more Shocked.
Posted by: eddy at January 24, 2012 8:53 AM
At least we know now why Pincus felt the need to rip off his employees and claw back stock auctions: he is a terrible real estate investor.
Posted by: NoeValleyJim at January 24, 2012 9:12 AM
Loosely related to this thread, looks like Facebook's IPO filings will be made next week. It will certainly be interesting to get some real facts about their financials. Lots of money about to flow to the south bay - good for CA tax revenues!
Posted by: A.T. at January 27, 2012 10:41 AM
Realtors are not that dumb to not know a sale next door (on/off the MLS). As everyone else, they use any information that would help them make a sale. They won't lie, but may not tell tutu always.
Posted by: SFwatcher at February 3, 2012 5:54 PM
u give realtors too much credit!
Posted by: johnny at February 6, 2012 6:25 AM
If you think Facebook money is going to solely flow to the South Bay and bypass SF, you're kidding yourself. I wouldn't be surprised if most Socketsite posters ages 25 to 50 didn't personally know one or two current or ex SF-dwelling Facebook employees who stand to profit to some degree great or small from the upcoming FB IPO.
Posted by: anon.ed at February 6, 2012 6:11 PM
The FB employees I know are going to use that money to go back to school and/or start their own companies rather than blowing it on declining real estate.
Real estate to them is like buying Kodak stock - something their parents did and now sorely regret. Just because they can doesn't mean they will.
And by the way, the world has changed in another way you haven't noticed. They have been able to sell all the options they want at prices near the IPO, an ability they have had for the past few years, and yet real estate declined anyway. The IPO isn't going to change things the way google's did.
Sorry dude, back to begging for buyers for you. Maybe you can bake some cookies, print up some flyers and stick them on a wooden post in the front yard, since you like to live in the past. The rest of us have moved on, Mr. Anon.Ed.Kodak.
Posted by: tipster at February 6, 2012 8:08 PM
Who said anything about real estate? I said money is coming to SF. Do you even like SF? It doesn't seem like you do. Anyway, it's comical that you think you can condescend in my direction, Tipster. The internet didn't make naysayer fence sitters who will never do a doggone thing in their lives anything approaching novel, dude.
Posted by: [anon.ed] at February 6, 2012 8:38 PM
"And by the way, the world has changed in another way you haven't noticed. They have been able to sell all the options they want at prices near the IPO, an ability they have had for the past few years, and yet real estate declined anyway. The IPO isn't going to change things the way google's did."
And that whole thing? Right. You know the ins and outs of who has got what options and who has done what at Facebook. http://blogs.wsj.com/wealth/2012/02/01/will-facebook-really-create-1000-millionaires/ This is a deeply pessimistic viewpoint, from the Journal, and it pretty much concedes that the company is creating plenty of millionaires, and that they won't be exercising options until "until the middle of next year." So, so much for your "everybody already privately traded their options away" take. I'll take the Journal over your ridiculous, worthless, misleading, trollish, miserly, and all around basically degenerate ravings if you please. Do yourself a favor, Tipster. Take a long break. You've lost the plot.
Posted by: [anon.ed] at February 6, 2012 9:26 PM
It's common knowledge that early Facebook employees already have been able to cash out through the secondary markets as mentioned in this Financial Times article.
Posted by: anonanon at February 6, 2012 10:26 PM
Yes, that is common knowledge and wasn't disputed.
Posted by: [anon.ed] at February 7, 2012 8:31 AM
funny Kodak comment ... lol as they say ... but you should remember that Kodak equity may stink, but Kodak Debt is the way to play it on Kodak
did your parents buy Kodak debt? parents are smart, so they probably did!
Posted by: johnny at February 7, 2012 8:47 AM
Well, if it's common knowledge, then you should know that Facebook is already baked into current pricing.
This isn't going to be like Google where it went from cold to hot.
The Facebook money is already in the system and prices fell anyway, not by a lot but they fell. The IPO will just continue more of the same.
Posted by: tipster at February 7, 2012 9:19 AM
Again with the direct "affecting the market as a whole" correlation strawman. Not having it. Again, refer to the WSJ article which tacitly states that next summer plenty of employees will be coming into plenty of money. Very much NOT "the money is already in the system." http://blogs.wsj.com/wealth/2012/02/01/will-facebook-really-create-1000-millionaires/ And sorry, but you've proven time and time again that you're incapable of summarizing scenarios with regard to stock options. ZNGA springs to mind. You were screaming doomsday. As if they didn't know that the Facebook announcement would have a residual effect. Over and over again, your points are shown to be negative wishful thinking by people whose knowledge bases dwarf your own. Does the board need to sick Noe Valley Jim on you yet again?
Posted by: [anon.ed] at February 7, 2012 9:26 AM
Did you read your own "more like a splash than a wave/we don't know exactly how many millionaires/they've been getting more stingy with the stock" article?
It talked about a "liquidity event" as if the employees have not been able to sell anything they want for years, so the author of that obviously penned-in-5-minutes article is just as out of touch as you are. The liquidity event was 3 years ago. And the real estate market has largely tanked right in the teeth of that liquidity event, the biggest one this area will have for a decade.
The IPO just shifts the location of where the shares are being sold. To an extent, it opens up demand but also unleashes huge supply - the net has been essentially a wash, though facebook may get a bit of a bump. The valuation of the shares at which they are going public is exactly in the range at which the shares have been trading already.
If the market couldn't stand up in the face of the biggest liquidity event of the decade, I don't see much change on the horizon. Sorry dude. As you once said, "scare tactics are dead."
Posted by: tipster at February 7, 2012 9:38 AM
A splash is not nothing, Tipster. As I said it's a rather pessimistic article. But it still clearly states that plenty of wealth will be created. And I'm sorry, but you're still talking about "The market" and Google's effect? As if Google was the only thing going on in 2004, in the first place? Guess you forgot the millions of posts you made about all the ARM-type loans and the credit market? How convenient.
Posted by: [anon.ed] at February 7, 2012 9:51 AM
It's not about to be created, it has already been created, and has been readily marketable for years. If your options vested last year, you could sell all of them the same day. They have been relatively stingy in the past three years, so by and large the wealth that will be created and distributed to the rank and file has already been created. Far more than half is already out there and available for sale to whoever wants to sell it.
That means the wealth created to the rank and file (and not concentrated at the very top) is now tailing off. The market will start to see less of it. Too late, dude. Sorry.
The market fell when it was on the upswing, so I can only surmise what it will do on the downswing. You missed it. It's over.
Posted by: tipster at February 7, 2012 10:15 AM
So Tippy, all the FB folks have already sold their options on the discounted secondary market? None of them held out for full price? I have not seen that. Can you provide a link?
Posted by: R at February 7, 2012 10:30 AM
I think tipster wins this debate.
Market dynamics are different today versus 2004 when GOOG went pubco. Main difference is the secondary private market exchange which has provided plenty of price discovery for Facebook, but did not for GOOG because of the lack of the private exchanges back then.
FB is way overpriced at current market talk.
75 to 100x EPS and 20 to 30x SALES is a bubbleish
Posted by: johnny at February 7, 2012 10:31 AM
"It's not about to be created, it has already been created, and has been readily marketable for years."
Says you, and not the Wall Street Journal.
I think tipster wins this debate.
The one he had with himself? About Google and Facebook as lynchpins to the SFRE market? Well, he won it and he also lost it. He was the only one arguing.
Posted by: [anon.ed] at February 7, 2012 10:35 AM
Of course I win. You can see the facebook effect in Palo Alto, which is where facebookers are buying, not dirty, smelly, gang and bum infested San Francisco. Can you blame them?
The YOY median price per square foot in Palo Alto is up 22%, the median is up 20%. By contrast, the medians in SF are DOWN YOY. Let me repeat: UP 20+% in Palo Alto, DOWN in SF.
They are passing San Francisco by. This is about Palo Alto. It has some effects in SF, but as I noted, those effects are now on the downswing. The effects of these companies is now on the way OUT.
Your hopes and dreams are about to be tossed out the window, anon.ed. You missed what little you were going to get. A few crumbs for you. That's it. And soon, even those will be gone.
Thanks for bringing this up, however. It's important to educate people that due to market changes, the effects have passed, they never really hit SF in a big way, and are now on the downswing.
Sorry to disappoint you.
What's also over is the ability of a Realtor to try to hype the market by pretending something that was never going to happen, and is already in the rear view mirror is about to hit SF so people should buy now. We're on to your scare tactics and now we have the tools to completely refute them. Your ability to sow fear and doubt is also so last decade.
No worries. You can still bake cookies at open houses. My favorite is Chocolate Chip.
Posted by: tipster at February 7, 2012 10:47 AM
So I guess I'll take that as a no, you don't have any actual data to back up your theory that all the FB folks have already cashed out.
Posted by: R at February 7, 2012 10:56 AM
^Look at the Palo Alto prices graph, R. That money didn't come from Santa.
Posted by: tipster at February 7, 2012 10:58 AM
So I guess I'll take that as a no, you don't have any actual data to back up your theory that all the FB folks have already cashed out.
Doesn't matter. Could have cashed. If they didn't want house before but could have, what changes now?
Read artile. Only 700 earlies, way smaller then dot com 1.
Posted by: Watcher at February 7, 2012 11:02 AM
So that settles it. No, you have absolutely no data whatsoever that supports your theory that FBers have all cashed out on the secondary market.
Why not just say that it's your theory as opposed to stating it as a fact and continuing to dig a deeper hole?
Posted by: R at February 7, 2012 11:06 AM
Why would you ever go to an open house, Tipster? Please. Now I've heard everything!
Posted by: [anon.ed] at February 7, 2012 11:15 AM
Oh c'mon R, now you are just asking for an exact proof of how many angels can dance on the head of a pin simply because you know that such data is unobtainable.
But as Watcher so astutely mentioned, it is also irrelevant. It doesn't matter if the form of the asset is in cash or stock, the two are openly exchangeable. My argument is not that they have already cashed out the stock and now it is sitting in cash and not stock, as if that makes one iota of difference, my argument is that the wealth they were going to hand out has already been mostly handed out and freely convertible to cash should any employee want to spend it on a home.
The wealth has already been theirs to spend. The facebook IPO will not change that. Your argument that we don't know the current form of that wealth is just nonsensical.
The amount of wealth distributed to the employees is tailing off. Whether they have converted it into cash or not is irrelevant. What we do knwo is that there is less on the way than has already been made available and freely spendable.
That's like arguing whether my money is in $20 bills or in $5s. It really doesn't matter: if I have it, I have it. The form of the wealth isn't going to make any difference to my spending patterns.
In google days, you would have had a point because there was no real valuation and no real market. That isn't true any longer. You too are living in the past.
So go bring your nonsensical, irrelevant arguments to some other forum. Your feeble, pathetic, attempts to try, in desperation, to hang on to the scare tactics of the last decade are not going to have any effect.
Posted by: tipster at February 7, 2012 11:20 AM
Your supposition is that all the FBers didn't want to wait for the IPO and so they sold on the secondary market at a discount. I'm saying that's not necessarily the truth, and asked for some data/article/fact other than what you suppose.
You call me names and talk about scare tactics. Good argument.
Posted by: R at February 7, 2012 11:27 AM
"It's not about to be created, it has already been created, and has been readily marketable for years."
There is my sentence, R. Perhaps you can point out where I said that they sold on the secondary market.
You might try Oatmeal cookies, R. They make for a wonderful smell.
Posted by: tipster at February 7, 2012 11:30 AM
Yes, they're marketable on the secondary market. Or is there somewhere else you can sell them? Please educate me, you obviously like spouting off.
Posted by: R at February 7, 2012 11:33 AM
But Tipster, you also said, "The FB employees I know are going to use that money to go back to school and/or start their own companies rather than blowing it on declining real estate."
So is it upcoming, or is it already there?
Yeah. You don't know what you're talking about at all. You probably don't have any FB friends, so you made that part up. But you abandoned it in favor of "the wealth has already been distributed."
Anyway, you seem to hate San Francisco. Dirty smelly blah blah blah. It goes beyond what are you doing talking about SFRE you'll never touch all the time. No it's sorta like, why are you spending your life here, then? Man oh man do you got issues.
Posted by: [anon.ed] at February 7, 2012 11:34 AM
Dude, the argument is over. You lost.
If you really need to see the relevant data on the subject, just check this link
Posted by: tipster at February 7, 2012 11:37 AM
You linked to a Redfin report about Palo Alto, buddy. That's all you brought to the "argument," that you initiated about FB as new lynchpin in place of Google. Not havin it. You're so devoid of any integrity any more. Something happened to you. You won't tell the message board, but something went wrong.
Posted by: [anon.ed] at February 7, 2012 11:42 AM
Helpful. Good argument. Anyone who disagrees is a realtor.
So I guess there is no other place to exchange pre-IPO options other than the discounted secondary market?
So your theory remains that any FBer who wanted a home sold their options and bought in Palo Alto?
So there will be no new millionaires with money to spend after the IPO (whether they spend it on RE or Lambos or "go back to school and/or start their own companies")?
Am I summarizing your points correctly?
Posted by: R at February 7, 2012 11:43 AM
I'm done going in circles with desperate realtors.
People reading this now understand the issues, and can make decisions with the relevant current (and not last decade) data instead of fear mongering by realtors who should be baking us cookies. I assume people reading this have a brain and can sort out the details. We all understand your point, R, (and we see the pathetic flailings of anon.ed at 11:42) but it appears it won't make much of a difference in SF.
My job educating the readers is done. You guys really should go argue over whether milk chocolate or semi sweet are the best to use. That's a far more important discussion for you two, imho.
Posted by: tipster at February 7, 2012 11:56 AM
I thought my question was pretty simple Tippy.. Did I summarize your points correctly?
And try to tone it down on the ranting about realtors and scare tactics and cookies. You're starting to sound a little nutty. Your 'readers' are getting disillusioned:
"Tip used to have a few useful insights but lately he's just to devolved into useless troll drivel. "
Posted by: R at February 7, 2012 12:37 PM
Well, that was a fun read. A couple of desperate realtors got totally owned by tipster! Y'all just keep on doing your rain dances hoping for the magic bubble re-inflator to appear. Ain't gonna happen. Anybody at facebook who wanted to buy a house has bought one. Most of those coming into more money aren't interested because they think of a house as a ball and chain and they don't want to limit their mobility.
Posted by: nixon at February 8, 2012 7:17 AM
"nixon" today, huh? Doubt it.
Posted by: [anon.ed] at February 8, 2012 7:47 AM
Am I delusional or did there used to be folks on this site who used facts and figures to support their points? I guess it's a sign of the times. Now we just make shit up and if we say it enough times it becomes fact. Truthiness.
Posted by: R at February 8, 2012 8:21 AM
FB employees have been prohibited from trading options/shares for the past 2 years.
April 6, 2010 at 12:51 am PT
"Facebook has prohibited its employees from selling their shares to other investors, its latest attempt to clamp down on the selling of its stock on secondary markets."
In fact, they fired an exec for buying on the secondary market.
April 1, 2011
"Facebook fired a senior employee who bought Facebook shares through secondary markets in violation of the company’s policy on insider trading..."
Posted by: steve at February 8, 2012 8:52 AM
R, didn't you see Tipster's redfin link? The interpretation that followed it was graduate level statistical analysis. What more could you ask for? I mean, he had that, his psychic ability to measure FB employees' minds regarding future plans, and his take that just about everybody already cashed out*. (Except the people he acknowledged to start with. Who won't buy real estate. Who later on in the thread he forgot about. Hey, it wasn't perfect. Genius can be sloppy.) But come on, R. You have to give it up for the sheer elegance of the mathematical model.
*Seems like Steve just shattered that one. Didn't even need NVJ this time.
Posted by: [anon.ed] at February 8, 2012 9:04 AM
Thanks for that out of date article from 2010, steve. Nice try. More desperation, I assume.
They were selling it weekly up until about three months ago, when the buyers dried up because the ask prices got too high. I assume they've been selling it since as well.
My understanding is that they have windows in which they can sell all the shares they want. Someone buying or selling outside of those windows is barred, but that's only to prevent insider trading, trading ahead of a big increase or decrease, the cause of which is not generally known outside of the company, which is why the exec was fired.
Posted by: tipster at February 8, 2012 9:12 AM
Looks to me like Steve just owned Tippy. And had actual data to back it up. Well played.
Posted by: R at February 8, 2012 9:13 AM
Looks to me like you two have better baking skills than critical reasoning skills. No raisins, please.
Posted by: tipster at February 8, 2012 9:20 AM
Ah yes, more realtor insults. Good job Tippy. Elevating the discord once again.
Posted by: R at February 8, 2012 9:22 AM
Let's set the record straight here folks. Steve was most correct but the story is more complicated.
The secondary markets for FB have traded as high as $141B. Data here:
FB along with several other companies who had stock actively trading on the private markets have created a class of RSU 'options' that cannot be traded on these markets; and FB has the right of first refusal to purchase any share of current employees. So its only the pure option grants held by early or former employees that have been actively traded on these secondary markets. This is a relatively small number.
More on RSUs and FB options trading on the secondary market here:
So pretty much all options/RSU given to employees over the past 2 years are not particularly liquid and those employees are set to realize enormous wealth.
IN 2009 FB reportedly had 1000 employees.
Per the S1 the company has 3200 employees. So more than 2200 employees have no or very little liquidity.
It's no surprise that with these changes in the option pool / supply on the secondary markets that the implied value of FB spiked up to $141B. We all know what supply constraints do when there is demand. We see this every day in our beloved SF RE market. :)
But look, everyone here is feeding the troll and its officially ridiculous. There is no denying the wealth that will be created by the FB IPO. There has already been tremendous liquidity to early share holders that cashed out at anywhere between 10 and 140B implied market value. And anyone that bought these shares is going to amass some serious capital on an IPO; except maybe a few that bought shares north of 141B, but I suspect that is a relative few and let's be honest, anyone that bought FB shares at 141 probably isn't hurting for cash. And this assumes FB stock doesn't skyrocket creating even more wealth. And many of these buyers may not be in the Bay Area.
But it is all a giant tippy red herring. The SFRE market does not hinge on the success or failure of FBs IPO. Yes the company and its success are critical to the general bay area tech momentum. But there is a more fundamental and systemic economic shift happening. And we're in the epicenter. Generational wealth is being created in our midst, en mass. Along with personal windfalls the likes of which we've not seen in quite some time.
"A public man must never forget that he loses his usefulness when he as an individual, rather than his policy, becomes the issue."
Richard M. Nixon
Have a good day.
Posted by: eddy at February 8, 2012 9:28 AM
Well done Eddy. Thanks for doing the research and actually presenting real info. That's all I've been asking Tippy for.
"The SFRE market does not hinge on the success or failure of FBs IPO."
Couldn't agree more.
Posted by: R at February 8, 2012 9:37 AM
Eddy, your article says EXACTLY what I said. They implemented a policy on insider trading. That doesn't mean no one can sell, it means no one can sell while facebook is negotiating a deal that could materially impact the stock price and to which the buyer doesn't have access to that information but the seller might. That's kind of rule #1 in business law class.
The other interesting thing about that article is how few employees have shares.
"However, our source tells us that the number of Facebook shareholders is “well below” 500". As of two years ago they only had a couple of hundred employees with shares? Yet the year before they had 1000 employees and were going to expand to 1500 by the date of the second article? That's a big surprise to me. And those would be the most valuable options. That tells me there are really only a few hundred people who are going to make big money.
Now I'm having a GREAT day! Thanks for that information!!
Posted by: tipster at February 8, 2012 9:41 AM
Omitted by Steve: "The new rule also leaves room for the company to open a trading window during which employees would be allowed to sell shares in the future."
All public companies have insider trading policies. Doesn't prohibit you from selling. You just need to have a pre-established plan, sell during a window or have a waiver.
Why have a insider trading policy if people can't trade? Also, what's been going on with second market if people can't trade?
From the WSJ: " Managers hired last year were getting as little as 2,000 shares – giving them paper wealth of a measly $80,000."
Small number of early hires are going to get a windfall and had liquidity. Many more recent hires, but much much less money.
Posted by: ReadingForRealtors at February 8, 2012 9:47 AM
Did you even read the links?
And now you're on to a whole different point. Now saying that it's good news because "only a few hundred people...are going to make big money". But you've been arguing for the last several days that they already made it.
Which is it?
Posted by: R at February 8, 2012 9:51 AM
Insider Trading? Really? You are king of trolls and your falsification and purposefully misleading statements are crazy.
You are consciously confusing "shareholders" with "option" holders, and further confusing option holders with those in possession of wholly illiquid RSU grants. I personally know 5 FB employees hired in the past 18 months that stand to gain a significant windfall.
Nothing you fabricate will change the facts.
Posted by: eddy at February 8, 2012 9:53 AM
First Republic will lend against RSUs.
They are hardly illiquid.
Posted by: tipster at February 8, 2012 10:07 AM
From Eddy: "Insider Trading? Really? "
Steve's headlines were:
"Facebook Implements Insider-Trading Policy"
"Facebook Fires Employee for Insider Trading"
Posted by: ReadingForRealtors at February 8, 2012 10:09 AM
ha. First Republic. The biggest local housing lender around. You just can't get out of your own way on this one.
Posted by: [anon.ed] at February 8, 2012 10:23 AM
Well given how stingy Facebook has been with grants, they really don't need to be very large to service them all! Ha ha. Well below 500!
Posted by: tipster at February 8, 2012 10:31 AM
Incorrect and again intentionally misleading. It's more like 2200 employees over the past 2 years, many with varying schedules moving forward past the IPO. Not to mention the old guard who will have additional vesting schedules. And theres' this:
27.4% of Facebook employees live in SF. http://www.almanacnews.com/news/show_story.php?id=10592
Posted by: [anon.ed] at February 8, 2012 10:36 AM
Posted by: R at February 8, 2012 10:42 AM
I hope everyone else is getting as much a laugh out of this as I am. This is actually pretty amusing.
Anyone will lend against value. And debt is the riskiest form of liquidity. The irony of using First Republic is pure comedy gold.
There has been so much written about FB that you could most likely spin any story you want here. But my earlier post at 9:28 pretty much lays out the facts.
Nothing you fabricate (or spin) will change the facts.
Posted by: eddy at February 8, 2012 10:43 AM
Yes, I've had a few chuckles to some of Tippy's (and new alter-ego ReadingForRealtors) comments. Throw enough nonsense at the wall and maybe some of it will stick..
Posted by: R at February 8, 2012 10:48 AM
From Eddy: "Nothing you fabricate (or spin) will change the facts."
Yup... " Managers hired last year were getting as little as 2,000 shares – giving them paper wealth of a measly $80,000."
Pac Heights will be on fire with $80k in people's pockets!!
From R: "Tippy's (and new alter-ego ReadingForRealtors)"
He's the one laughing at that one!
Posted by: ReadingForRealtors at February 8, 2012 11:06 AM
From Eddy: "There has been so much written about FB that you could most likely spin any story you want here. But my earlier post at 9:28 pretty much lays out the facts."
As I've said, I know five current FB employees hired in the past 18 months who stand to net high six digit returns @ a 100B valuation.
Good luck with your internet "research".
Posted by: eddy at February 8, 2012 11:18 AM
DRE: "As I've said, I know five current FB employees hired in the past 18 months who stand to net high six digit returns @ a 100B valuation."
WSJ: "Managers hired last year were getting as little as 2,000 shares – giving them paper wealth of a measly $80,000."
R: "Am I delusional or did there used to be folks on this site who used facts and figures to support their points? I guess it's a sign of the times. Now we just make shit up and if we say it enough times it becomes fact. Truthiness."
Posted by: ReadingForRealtors at February 8, 2012 11:24 AM
Again with the Eddy is a realtor thing? Really? Get some new material Nixon/Salome/AT/anon/ReadingforRealtors.
Posted by: [anon.ed] at February 8, 2012 11:26 AM
Tippy: Eddy and the WSJ are not mutually exclusive, you know. 'Manager' is a pretty low level person, so it's certainly possible they only stand to net $80k. But I also put as much weight in eddy's anecdote as I do your ramblings.
Posted by: R at February 8, 2012 11:41 AM
FWIW, It's possible that my friends are FoS with respect to their potential windfalls. They are not managers, fyi. And I don't dispute the fact that a manager from 2012 may only have 2000 RSUs.
I'll give a million shares of FB stock to anyone that prove I have anything to do with real estate other than just being interested.
Nevertheless, the long term, or even short term, impact of FB IPO hardly have much impact on SFRE. But its a foregone conclusion that Tipster will buy at the top of the market and watch it burn to the ground. Man that guy has the worst luck.
Posted by: eddy at February 8, 2012 11:58 AM
Apropos of this thread, NYTimes just posted an article about the supposedly impending FB real estate bump (name link). (The article is silly fluff but it was amusing to see it after following this thread for the last couple days.)
Posted by: shza at February 8, 2012 4:53 PM
From: [anon.ed] : "Again with the Eddy is a realtor thing? "
Guy goes full mental on me because he didn't even read the headlines of the posts on his side? And he's just an "interested" guy who just happens to know guys at Facebook?
Hangs with tech friends but responds to the idea of an insider trading agreement not by "Yeah, I signed one of those everywhere I worked" but by "King of Trolls!"??
A tech guy who blames losing an argument on "the internet"??
"Insider Trading? Really? You are king of trolls and your falsification and purposefully misleading statements are crazy."
Quoting your WSJ link is " falsification and purposefully misleading statements are crazy." but now he admits he might be FoS??
Reads like a Duck... Quacks like a Duck...
From shza: "NYTimes just posted an article"
" recently sold an 8,000-square-foot-house to a Facebook employee, "
Hey? How did the guy buy a house before the IPO with no liquidity?
Posted by: ReadingForRealtors at February 8, 2012 5:17 PM
Good lord. AT & Tippy are sounding more and more unhinged recently. Must be all the signs pointing to an improving market (see link).
Posted by: R at February 8, 2012 5:36 PM
"Hey? How did the guy buy a house before the IPO with no liquidity?"
Maybe he is foreign.
Posted by: [anon.ed] at February 8, 2012 6:09 PM
@RFR, thanks for clarifying that you and Tipster are one in the same. Trollers gonna troll.
I'm just saying that I haven't seen any paperwork from the people at FB that I am referencing. I'm stating what I have heard from first hand sources that have no reason to misrepresent. You on the other hand have not provided anything useful here other than obfuscation.
The 80k number you reference from the WSJ may be accurate. Here is another indicating that a new employee straight out of college getting 120k worth of RSUs.
And just for clarity on the Insider Trading comment: you again confuse the term as it relates to a public company with no context to the implications of a private company. FB policy prohibits current employees (insiders) from participating (trading) in the secondary markets. The concept of "Insider Trading" (i.e., the act of trading on non-public information) is a very specific thing. The actual reporting on that story was unfortunate and it is still not clear whether he was fired for simply trading, or trading on insider information. Maybe I'm giving you too much credit or maybe these subtle concepts are lost on a broader audience.
Tipster: "Hey? How did the guy buy a house before the IPO with no liquidity?"
The best part is that FB could drop off the face of the earth and its not going to have a material impact on SFRE. There is a global economic shift occurring and the economic output is simply staggering. Here is a great little chart indicating the total economic output by century as a total percentage. Obviously the 20th century is going to show the biggest and most significant jump. But it shows the 21st century already consuming 23% of all historical output in just the first 10 years of the decade.
The world economy has never before grown like we're seeing. The RE bubble, the Greece crisis, etc.. are largely just blips that are very real and have tangible impacts, but looking at the macro picture it really is quite staggering and the transformation that is happening.
Posted by: eddy at February 8, 2012 6:20 PM
From [anon.ed]: "Maybe he is foreign."
"When Ken DeLeon, a Silicon Valley real estate agent, recently sold an 8,000-square-foot house to a Facebook employee, he said, the movers showed up at the client’s old 1,000-square-foot home and asked, “Did you win the lottery?”"
But Please Please don't write a book!!!
If you think that this is a "hinged" sentence:
"Insider Trading? Really? You are king of trolls and your falsification and purposefully misleading statements are crazy."
You might just end up writing ....
"Silicon Valley has been good to Mr. DeLeon, a former lawyer, who said he sold $275 million worth of homes last year, and who is finishing up a memoir about overcoming illness, injury and loss that he calls “Why Do Bad Things Happen to Sexy People?”
"Why Do Bad Things Happen to Sexy People?"
Posted by: ReadingForRealtors at February 8, 2012 6:23 PM
Yeah, too much credit.
Posted by: eddy at February 8, 2012 6:30 PM
From Eddy: "@RFR, thanks for clarifying that you and Tipster are one in the same."
Here's my inside information. I know for a fact that I am not tipster, thus I also know for a fact that you have no problem with making misrepresentations. Since he knows he is not I, you've given him the same certainty. Outsiders are out of luck.
Why would a simple interested party lie like that???
"Doesn't prohibit you from selling. You just need to have a pre-established plan, sell during a window or have a waiver.
How are employees trading on second market if they're all prohibited?
Valuable Employee: I need to buy a house
Boss: No liquidity
Valuable Employee: If I quit and go to Google, I can sell my stock
Boss: We can work something out...
Please Please Don't write untill you've figured out why bad things happen to sexy people!
Posted by: ReadingForRealtors at February 8, 2012 6:47 PM
Who to believe??
A liar who might be a Realtor: "FB policy prohibits current employees (insiders) from participating (trading) in the secondary markets."
Or a Realtor who might be a liar: "One of the biggest changes in the tech world that is driving real estate appreciation now is the strength of the secondary market for private companies. In the past employees had to wait for a liquidity event such as an IPO to get funds and buy a home. There is now a strong secondary market where shares of Facebook, LinkedIn (pre IPO), Zynga, and many other companies are trading. This has resulted in quicker liquidity for early employees, which is driving the housing market. I discuss the impact of this on the housing market in the next topic."
Jean Buridan help me!
Posted by: ReadingForRealtors at February 8, 2012 7:15 PM
RFR: "Guy goes full mental on me because he didn't even read the headlines of the posts on his side?"
I assumed "full mental" was for the Insider Trading" comment that was originally posted by Tipster. I'm still not unconvinced.
One troll, two trolls. Doesn't really matter. What's funny is that you think anyone is actually parsing (or reading) the gibberish.
Posted by: eddy at February 8, 2012 7:26 PM
From Eddy: What's funny is that you think anyone is actually parsing (or reading) the gibberish."
Funnier still is how your "friends" at Facebook mentioned "first hand" their options value but not a word about liquidity possibilities. Unless Mr. Ken DeLeon is lying on his website and to the New York Times....
Posted by: ReadingForRealtors at February 8, 2012 7:35 PM