$500 million?? For 10%?! Of THIS?!

http://secondlife.reuters.com/stories/2007/11/05/linden-lab-investor-sold-10-percent-stake-report/

The obligatory question addressed to Residents being:

WTF???!!!

I mean, I'm really glad somebody with that kind of money thinks LL is worth that much, and I really hope they're right, but still, WTF?!

Er.. Maybe that number is in L$ ??

I'm speechless because I can't believe the numbers. Is it remotely possible that LL is worth that much? Does the business community have dramatically more faith in SL than it's residents?

WTF is about all I can say too.

Hey I have faith in LL! I think honestly that they do pretty good considering the scope of SL... sure customer service isnt always perfect, but when you're getting millions upon millions (I don't think I'm exaggerating) of tickets and ARs daily.. you slip a little bit.

Considering how huge the SL world is, and how many people there are in it, and how much is created daily, I'd say LL is doing an amazing job, in all seriousness.

SL is revolutionary. Forward thinking investors see well beyond our petty little issues as residents. I think this is the future, folks. This, or a competitor (which doesn't exist yet).

If the company's valuation is really $5 billion, I guess I can finally see why Google hasn't bought it up yet.

I didn't mean to sound like a LL basher. I love SL very much and hope despite all it's flaws that it will continue to grow. But I still think it's too shaky and too early to believe that 10% of the company is worth over $500mil. Not an investment I would make, if I could. Maybe that's why I'll never be rich though.

And I thought buying an island was expensive....

That does seem awfully high.

Let's do a quick sanity check. These numbers are highly suspect, for reasons that have been discussed here before, but...if we assume that the "$US spent" figure is an indicator of the amount SL "makes" in a day, then we might say LL makes about $400M per year.

A typical business might be valued at as much as 7 times earnings, or $2.8B. A 10% slice of that would be $280M.

Well, well, well...an answer that's at least in the same order of magnitude as the reported purchase price. How very interesting!

Tax time is coming in 5 months or so. Capital gains loss. Nuff said.

The numbers are even more suspect for if you RTFA it points to another blog that reports a *rumor* of the sale price.

No news here - please move along.

"Second Life’s parent company, Linden Labs"

Linden Labs?

I wonder who that company is.

Broccoli

Wow... I didn't think 10% would be worth that much! Maybe half of the stakes but not only 10%. I guess this does mean LL is a big corporation now.

I wonder if those shares/stakes come with a really good stipend?

Reuters report:

"Smith declined to comment when contacted by Reuters.
Linden Lab was not immediately available."
Lag!

Yeah yeah, and last June Valleywag reported that LL completed a small round of funding, during which it was valued at $750M total.

But I don't see anything in the Mercury, Redherring, or VentureWire. soooo ... *yawn*

However, I'm sticking with my bet that Phil & co won't be completely happy unless they go public. And certainly a $750M valuation ain't enough for that in this climate. So I'm sure they're happy to see this latest rumor!

I think this is misleading. Read the article carefully, because it makes more sense if interpreted differently.

The way I see it, 10% of Catamount Ventures was sold for $500,000, not 10% of SL/LL.

Say I have a holding company, and all I hold is one share of Google. You could say "Ava's Holding Company, an investor in Google, sold a 100 percent stake in the company for $100." If read wrong, it sounds like Google just sold for $100. If read correctly, it just says I sold a single share of Google for $100.

I think the problem is the writing is ambiguous. Assuming Catamount is a venture capitalist company and holds much more than just some shares in LL, selling 10% of Catamount for half a billion might be reasonable.

10% of catamount sold for 500 million, not 10% of linden lab...

It might be true, it might not. Either way, it won't surprise me enough to roll out the question and exclamation marks until I've seen the books. =D

At least two people in the universe also think Alex Rodriguez is worth something in the same neighborhood.
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That doesn't mean they are right. And if someone really paid that for LL and not for some part of the holding company of LL, I'd say they have money to risk on a very shaky venture.

You're absolutely right, Ava. There is no way you can interpret any value upon LL based on this story. LL is only one of an unknown number of holdings that Catamount has. Ten percent of their TOTAL holdings were sold for $500M. For all we know, LL may be one of ten thousand holdings and it's contribution to Catamount is only ten cents. Not likely, I know, but very possible.

SOOOOOO this is where the number 7 servers are coming from!!!

I'd take the whole thing with a grain of salt and consider that the Reuters article wasn't properly fact checked. For starts, the website they are reporting is TechCrunch, not TechCruch.

When you navigate to TechCrunch, the TechCrunch article references that a 10% sale was confirmed and that there are RUMOURS that the sale was above 500 million. Not that there was an actual sale for 500 million confirmed as a fact.

btw, Catamount's last fund closed at 24M$. Let's say they get a 10x markup on everything in the fund (unlikely), that's still only 240M$. So 500M$ for 10% of them seems a little flaky too

Maybe the number is just plain wrong.

How can it be wrong? It was in a story on the internetz!

omg!! lesse... 5 bil divided by... what is it, 1024 servers or so??... dividing my parcel share...

OMG!!! i'm worth almost 20 million dollars!!! (gah, i -wish!!!-)

I don't think anyone else but you can me notice that Linden Labs do not exist. For those who still don't get it. Scroll down to the bottom of the screen and read the last copyright.