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The entire point of Facebook is to make you jealous. Why does that person have more friends than I do? Why do they go to such fun places while I'm at work? Why do their friends have better abs? Why does my wife have so many male friends who show off their abs?
But I'm not jealous of anyone who owns shares of Facebook. That's because, as high as Facebook shares might rise on the day of the company's initial public offering, they probably won't match the IPO of VA Linux, which on Dec. 9, 1999, set the record for the biggest price rise any stock had seen on its first day. And I owned some of it.
A few months before VA Linux went public, I got a very long, very legal letter in the mail that, luckily, had some parts in bold. Those parts mentioned a friend of mine from Stanford named John Hall. We hadn't talked since I graduated six years earlier, and this seemed like a pretty formal way to get back in touch. But the bold parts said John was giving me 140 "friends and family" shares of the company where he worked as vice president. I could buy those shares for $30 each, which, the letter implied, was a really good price for either VA or Linux, let alone for both of them.
I was excited to finally get to be part of the Internet bubble, which we didn't actually call a bubble back then. We called it the Internet thing that keeps getting bigger--infinitely and in a completely safe way. We were too busy buying domain names to think through our metaphors. But mostly, I felt touched that John still thought of me as a friend. Or maybe even family. Wall Street lawyers are so specific that you'd think they would be clearer about that distinction.
Still, I was a little wary. Up until then, all the letters I got asking for money were from the Stanford parking-ticket authorities. But all the business-type friends I consulted told me I was lucky to be part of an Internet IPO, since companies try to set their initial price below market value so they will get some attention when their stock goes up the first day. Leaving money on the table like that just to get attention seemed insane to me, until I remembered that I had decided to use my Stanford degree to write columns that feature a picture of my face in a magazine instead of starting an Internet company.
So I mailed a check for $4,200. I didn't really pay attention to the company until I saw the CNBC anchors get really excited one morning about the VA Linux IPO, which went from $30 to $299 on the first trade and ended the day at $239.25, a 698% gain on my investment. I made $29,295. For lending a guy my Oldsmobile station wagon. If I had given him a Saab, I bet I could have retired that day.
John, who wasn't even a computer guy, made even more that day: $700 million. After I went through a bunch of friends to get his e-mail address to thank him, we caught up a little bit. But we soon lost touch again, since he was busy, probably buying Oldsmobile station wagons and crashing them into one another for his entertainment.