Northern,WI 1/22/2013 (BasicsMedia) – FaceBook (NASDAQ:FB): The WinkleVie Fund Social Media Start-Up and will not go away or stay out of the news for any length of time. The Harvard Rich boys threw some cash to a competitor ….albeit not a serious one.
Tyler and Cameron Winklevoss have put $1 million into SumZero, which was founded by fellow Harvard University alumni Divya Narendra and Aalap Mahadevia in 2008, the article said. Narendra was an ally to the Winklevoss twins during their lawsuit againstFacebook, which won the brothers a cash and stock settlement valued at $65 million at a time when the company was valued at $15 billion.
FaceBook stock has leveled off over the last few months as selling pressure has subsided for now and CEO Mark Zuckerberg publicly talked about his desire to hold shares at these levels.
SumZero was founded by Divya Narendra (former co-founder of ConnectU) with the intent of changing the way professional investors shared information. Since its inception in 2008, SumZero has grown to become the largest online community for hedge fund, mutual fund, and private equity professionals with nearly every well-known fund represented in the userbase, including Greenlight, Pershing Square, and Weiss Asset Management.
SumZero is a reciprocity-based platform, meaning that members are required to share certain pieces of information in order to draw from the intellectual product of thousands of SumZero members. In addition to accessing highly-differentiated investment research, the platform further enables members to build a track record, expand their networks in highly-relevant places, and identify further professional opportunities within the industry.
Last year the brothers formed Winklevoss Capital as a vehicle to invest their personal wealth. Their first investment in June was SumZero, which brings together investors to share trading ideas and research.
SumZero.com has parallels with the first versions of Facebook. For one, Mr. Narendra believes the key to ensuring high-quality ideas was exclusivity. The site allows investors to become members only if they work on the “buy side.” SumZero defines that group as investment professionals at hedge funds, mutual funds, and private-equity firms. Analysts from the “sell side” such as Wall Street banks aren’t allowed.
“We’re offering the site as an alternative to sell-side research,” Mr. Narendra said. The site offers a weekly newsletter available to anyone but asks users for permission before placing their material in it.
The appeal for members is the chance to read ideas from other investors, but also to spread the word about investments they already have.
The four-year-old site has about 7,500 members, and Mr. Narendra says he continues to review each application personally, rejecting about 75% of them. Even the Winklevoss twins weren’t given access to the site before they become part owners of it.
Tyler likens the concept to the early days of Facebook, when only people with “.edu” email addresses from certain universities were eligible to join. “It’s the same check,” he says.
Disclaimer: We have no position in any stock mentioned here.