Facebook IPO Expected to Boost Silicon Valley Economy
It is expected that Facebook IPO will be a gift not only for the technology sector, but also for local entrepreneurs, who stated that they are smarter and better prepared to avoid the catastrophe of previous dotcom bubble.
Leonard Mezhvinsky, developer Millbro, California, spent the past three years, the construction of real estate in Hillsborough, 30 minutes north of the Facebook headquarters in Menlo Park. He expects $ 13 million; six-bedroom house is scheduled for completion in August or September, just in time for the employee Facebook recently rich from the initial public offering to spend a little money.
"It's very simple», Mezhvinsky said the question as Facebook in the IPO will affect the local real estate. "Facebook IPO instantly create several millionaires when they sell their shares to cash will look for higher end properties in and outside of San Francisco."
Mezhvinsky, the main winner on the development of the property, said that he had seen an increase in activity on the local market. He said that the growing interest in the property may be due to multi-millionaires cashing in stock or forecasting cash flow, after an initial public offering of nearby companies gamemaker Zynga in December and a social media site LinkedIn in May.
Early workers, or those with higher tenure, such as the founder and CEO Mark Zuckerberg and many of his colleagues at Harvard, along with a team executive, is likely to have a majority of the shares of companies in more than 3,000 employees.
Mezhvinsky expects the wealth created from Facebook in the IPO dwarf, Zynga and LinkedIn together, although it will not instantaneously, as employees with stock options have to wait months to cash in their shares, and the newly rich usually takes some time to adjust to their newfound wealth, he said.
"They still live in apartments and small houses, and suddenly they have a $ 20 million IPO shares," said Mezhvinsky.
There are also rumors of speculators pulling out of property not far from the Facebook headquarters, in the hope of flipping the properties of the newly-rich workers. But Mezhvinsky said that developers were more cautious than they were before the dotcom bubble for more than ten years ago.
"Developers who are not careful, probably bankrupt now. Those who were semi-cautious now fully cautious," he said. "But as the economy improves in three or four years that will go away caution, as he always does."
Mezhvinsky, who began working in Silicon Valley in 2007, says developers who previously built three or four houses, before the real estate bubble may be set up one or two these days.
He said that "Every person in the cut of the risk-taking."
Ron Gong, managing director of financial management and advisory firm Harris myCFO wealth in Palo Alto, said that riches have attracted service providers, regardless of if it's Silicon Valley or elsewhere. But as people spend money and invest is different compared to the era of dotcom.
"Business models have been tested, and there is more experience," he said. "So the more realistic assumptions and a return to the basics of business, are used."
Hong, who worked in wealth management business in the area for 23 years, said most of the recent creation of wealth in Silicon Valley is due to social media and related technologies.
Harris myCFO, which means "a comprehensive Family Office", also has entrepreneurial roots in Silicon Valley. Hong said his company was accustomed to working with the ultra-affluent, who have at least $ 25 million in investable assets, and those who can not yet in this class of wealth, but it can be.
"Those are the people we want to work closely with and invest in them," he said.
Gong said that he could not disclose whether his client has worked for social media companies in Silicon Valley.
But he said: "We know very well all these companies, and in the heart of Silicon Valley, we are well versed in the management of wealth, which come on a daily basis."
Leonard Mezhvinsky, developer Millbro, California, spent the past three years, the construction of real estate in Hillsborough, 30 minutes north of the Facebook headquarters in Menlo Park. He expects $ 13 million; six-bedroom house is scheduled for completion in August or September, just in time for the employee Facebook recently rich from the initial public offering to spend a little money.
"It's very simple», Mezhvinsky said the question as Facebook in the IPO will affect the local real estate. "Facebook IPO instantly create several millionaires when they sell their shares to cash will look for higher end properties in and outside of San Francisco."
Mezhvinsky, the main winner on the development of the property, said that he had seen an increase in activity on the local market. He said that the growing interest in the property may be due to multi-millionaires cashing in stock or forecasting cash flow, after an initial public offering of nearby companies gamemaker Zynga in December and a social media site LinkedIn in May.
Early workers, or those with higher tenure, such as the founder and CEO Mark Zuckerberg and many of his colleagues at Harvard, along with a team executive, is likely to have a majority of the shares of companies in more than 3,000 employees.
Mezhvinsky expects the wealth created from Facebook in the IPO dwarf, Zynga and LinkedIn together, although it will not instantaneously, as employees with stock options have to wait months to cash in their shares, and the newly rich usually takes some time to adjust to their newfound wealth, he said.
"They still live in apartments and small houses, and suddenly they have a $ 20 million IPO shares," said Mezhvinsky.
There are also rumors of speculators pulling out of property not far from the Facebook headquarters, in the hope of flipping the properties of the newly-rich workers. But Mezhvinsky said that developers were more cautious than they were before the dotcom bubble for more than ten years ago.
"Developers who are not careful, probably bankrupt now. Those who were semi-cautious now fully cautious," he said. "But as the economy improves in three or four years that will go away caution, as he always does."
Mezhvinsky, who began working in Silicon Valley in 2007, says developers who previously built three or four houses, before the real estate bubble may be set up one or two these days.
He said that "Every person in the cut of the risk-taking."
Ron Gong, managing director of financial management and advisory firm Harris myCFO wealth in Palo Alto, said that riches have attracted service providers, regardless of if it's Silicon Valley or elsewhere. But as people spend money and invest is different compared to the era of dotcom.
"Business models have been tested, and there is more experience," he said. "So the more realistic assumptions and a return to the basics of business, are used."
Hong, who worked in wealth management business in the area for 23 years, said most of the recent creation of wealth in Silicon Valley is due to social media and related technologies.
Harris myCFO, which means "a comprehensive Family Office", also has entrepreneurial roots in Silicon Valley. Hong said his company was accustomed to working with the ultra-affluent, who have at least $ 25 million in investable assets, and those who can not yet in this class of wealth, but it can be.
"Those are the people we want to work closely with and invest in them," he said.
Gong said that he could not disclose whether his client has worked for social media companies in Silicon Valley.
But he said: "We know very well all these companies, and in the heart of Silicon Valley, we are well versed in the management of wealth, which come on a daily basis."
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