Facebook, now Meta Platforms Inc. IPO in 2012 created a few billionaires and several millionaires. The social network's co-founders were among the youngest billionaires at the time, and the returns on their original investments were extremely profitable.
So much so that Eduardo Saverin, who was a 21-year-old college student when he made his first seed investment into Facebook, renounced his U.S. citizenship just in time to save on taxes. Saverin said he is moving to Singapore "indefinitely" but retained his Brazilian citizenship.
Enter Chuck Schumer
U.S. politicians and the Internal Revenue Service (IRS) were not big fans of Saverin's move, though. His decision was controversial enough that it led to Chuck Schumer (D-N.Y.) proposing a new legislation called the ex-PATRIOT Act.
The proposed rule targeted individuals who renounce their U.S. citizenship or terminate their long-term U.S. residency for tax purposes.
Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox.
It also proposed a tax on these individuals by treating them as if they had sold all of their worldwide assets at fair market value on the day before expatriation. This means that any gains from this deemed sale may be subject to U.S. capital gains tax.
Saverin is said to have still saved $67 million, but that's not the full story.
See Also: ‘When Elon Musk Met Jack Ma And Instantly Regretted It’
Here's How Profitable Saverin's Investment Was
When Mark Zuckerberg came up with the idea for Facebook, he did not have enough money to run the service. That is when Saverin stepped in and invested his life savings of $30,000 in 2004.
"Something I would've never imagined was when I put all my life savings into the company, that it would have been an IPO at this level."
While he didn't think much of it at the time, it is estimated to have surged 100,000 times when Facebook went public in 2012.
"You never imagine that $30,000 accumulated through your life, through gifts and birthday parties and other events, and investing it in the company would create this type of returns."
Saverin has since established his venture capital firm, B Capital, and closed deals worth over $140 million, including Ninja Van in Singapore. He also invested in Antler, an early-stage venture capital fund.
His net worth currently stands at $26.9 billion, according to the Bloomberg Billionaires Index, which makes him the 63rd richest person in the world.
Saverin's $30,000 investment could perhaps be one of the best investments in modern history.
Check out more of Benzinga’s Future Of Consumer Tech by following this link.
Photo courtesy: Wikimedia
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
