MENU

U2’s Bono plus Facebook equals billions

Just over two years ago, the Irish rock star Bono was dubbed “the worst investor in America” by the financial site 24/7 Wall Street. Bono is one of the founders of the private equity firm Elevation Partners, which had made “a string of disastrous investments which even bad luck could not explain.” The site concluded that the “Irishman would have been better off in CDs of the financial sort.”

The investing ability of Bono and Elevation Partners looks very different today, of course. The private equity firm bought a 1.5% stake in Facebook (Nasdaq: FB) back in 2009, which it was later able to increase to a 2.3% position. That prescient investment may now be worth around US$2 billion or so. When it comes to growth investing, fortunes — both literally and figuratively — can change very quickly.

Elevation Partners was founded in 2004 by Bono and several Silicon Valley luminaries. According to its website, it’s focused on “large-scale investments in media, entertainment and technology businesses.” The firm is particularly interested in companies that are “capitalising on technology disruption” and has current positions in the online companies Move (Nasdaq: MOVE) and Yelp (NYSE: YELP) .

By early 2010, Elevation Partners had gotten off to a rocky start. Its investment in Palm, the smartphone manufacturer that was subsequently acquired by Hewlett-Packard (NYSE: HPQ), was doing poorly. And its initial investment in Yelp, the online guide to local businesses, was looking ill-advised. According to 24/7 Wall Street, Bono had lost “millions and millions of dollars” as a result of his relationship with Elevation Partners.

Last week, of course, Elevation’s Facebook investment became a fascinating turnaround story. The financial press was breathlessly talking about how Bono was now worth over US$1.5 billion, and was richer than either of the two remaining Beatles. Bono had become part of the frenzy surrounding one of the most hyped IPOs in recent memory.

Fortunately, Bono stepped in to provide some clarity (and sanity) to the situation. Last Friday, he said:

Contrary to reports, I’m not a billionaire or going to be richer than any Beatle — and not just in the sense of money, by the way. In Elevation, we invest other people’s money — endowments, pension funds. We do get paid of course. But you know, I felt rich when I was 20 years old and my wife was paying my bills. Just being in a band, I’ve always felt blessed.

He also said that he wanted to learn more about technology because he was interested in “forces that change the world.”

Regardless of how much Bono has made personally from Elevation’s Facebook investment, his experience is very instructive to investors. First of all, investing in technology companies is a way for him to learn. Education should always be a big part of investing. Secondly, he and his partners placed bets among a host of disruptive firms and technologies. And one of them ultimately paid off handsomely. There’s nothing “lucky” about patience and focus.

Finally — and most importantly for me — Bono doesn’t measure his self-worth by how much money he has. The line, “Just being in a band, I’ve always felt blessed” is the best takeaway of all from this tale, in my opinion.

If you’re in the market for some high yielding ASX shares, look no further than our “Secure Your Future with 3 Rock-Solid Dividend Stocks” report. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

 More reading

The Motley Fool s purpose is to help the world invest, better.  Take Stock  is The Motley Fool’s  free  investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  Click here now  to request  your free subscription , whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

A version of this article, written by John Reeves, originally appeared on fool.com

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!