How long did it take Facebook to recoup?

Unless your name is Rip Van Winkle, then you know that Facebook is poised to be one of the biggest public online companies since Google. 

Think about it.  If we all followed the Peter Lynch philosophy of “Invest in what you know”, 250 million people out there would love to own a piece of Facebook stock.

And soon enough, as was confirmed this week by these initial filings, some of those folks (although a very select few, I’m sure) will have that chance when Facebook finally has its IPO.

This isn’t a stock and bonds blog, so what does this have to do with Broadway?

What interested me about the articles I read about the IPO was how long it took Facebook to become profitable. 

6 months?  1 year?  3 years?

Wrong, wrong, and wrong again.

It took five years for Facebook to make a dime.  Five years.

I found that intriguing, because in the Broadway world, a five year payout would be celebrated, but still slow.  Our monster hits pay back in about 9 months to a year now (it used to be a sell out could recoup in about six months, thank you rising costs).   Of course, it’s an entirely different type of economic structure, so admittedly it’s a bit like comparing apples to pineapples.  (The problem with Broadway is that our costs can’t be controlled as much as the costs of a tech company, and our upside is a wee bit more limited so companies can afford the risk of investing more capital as you go.)

But still, I took it as a great reminder that sometimes, even when you’ve got something that 250 million people want to use, you’ve got to be patient and unbelievably persistent if you want to be profitable.

 

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Comments

[Ian]

I hope you don't mind me posting this but I have on my website a way to profit from the Facebook IPO

[Kim]

Ah, Patience. That finicky lady. :)