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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

May 9, 2012 at 10:13 AM

Facebook IPO to fund Seattle NBA team?

Seattle basketball fans may have a reason to cheer for Facebook’s upcoming public stock offering.

One of the early investors who stands to make a quick fortune on the deal is Chris Hansen, the San Francisco hedge fund manager trying to develop a new arena in Seattle and bring an NBA team back to town.

Hansen bought private Facebook stock in 2010 that’s worth up to $1.27 billion at the high end of Facebook’s IPO plan, according to a Forbes story. It estimates that Hansen paid up to $500 million for the shares.

Altogether his fund, Valiant Capital, has 36,335,590 shares of Facebook, or about 2 percent of the voting shares, according to the social networking giant’s stock registration statement. For perspective, Microsoft has just under 2 percent, with 32,784,626 shares.

If the stock prices at $35, that would net Hansen’s investment firm nearly $800 million – enough to finance two new basketball arenas without any public assistance.

Or to build one arena and a new shipping terminal for freight traffic farther away from the stadium district. Or to refit KeyArena with heated massage chairs throughout the stands and provide helicopter shuttles to fans from Bellevue, Everett and Federal Way.

That’s at Facebook’s initial price, at the high end of the projected range. Imagine the possibilities if the stock jumps after the offering.

Forbes notes that Hansen’s Valiant Capital was managing $3.26 billion worth of assets as of February, including big stakes in Apple and Google.

It’s not clear how much of a personal stake Hansen has in these holdings. Hedge funds typically charge a percentage or two for management and take a share of the funds’ returns, perhaps 10 to 25 percent.

At Valiant, he’s representing an unnamed group of investors in the fund, similar to the way he’s representing a group of unnamed investors pursuing the Seattle basketball venture.

Comments | More in | Topics: Entrepreneurs, Facebook, Public policy

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