Last week, entrepreneur Sam Hamadeh, the head of PrivCo, a three-year-old private company research firm, made a provocative claim to the L.A. Times. “There is a growing sense,” he said, that Facebook CEO Mark Zuckerberg, “talented though he may be, is in over his hoodie as CEO of a multibillion-dollar public company.”
Hamadeh’s comment drew so much attention that by Monday morning, he appeared on the “Today Show” in a segment titled, “Should Zuckerberg Quit as Facebook CEO?”
No doubt Hamadeh, who is often cited dozens of times a week by media outlets, was trying to stir the pot. After his television appearance, he told me it’s “unlikely” that Zuckerberg is going anywhere. On the other hand, he added, it wouldn’t “hurt the stock one bit,” and “Zuckerberg might even be relieved to be chairman and head of product and engineering and leave the CEO duties to someone of his own choosing.”
There’s a method to Hamadeh’s madness. PrivCo’s business consists of selling subscriptions to financial institutions, media firms, and anyone else looking for intelligence about privately held companies that might go public or be acquired. (PrivCo charges from a couple of thousand dollars per year for a single user to tens of thousands of dollars per year for a corporate enterprise account.)
But Hamadeh has also been right a surprising amount of the time. A year ago, he publicly dismissed Facebook’s then secondary market valuation of roughly $75 billion. In an August 2011 piece, Business Insider wrote of him, “Right now, aggressive investors — including storied hedge fund SAC Capital — are going out and loading up on Facebook shares for around $32 to $35 a pop… [and] one man, one analyst, thinks they are wrong.” Then, a day before Facebook’s highly anticipated May IPO, he told me the shares would plummet from their offering price of $38 to trade in the “$20s” by yearend.
Hamadeh has made correct predictions about other companies, too. Last fall, Hamadeh pegged Zynga’s valuation at $5.5 billion when the broader industry was valuing the company at $20 billion. (Zynga’s current market cap is just $2.4 billion.) And PrivCo was one of the first to sing the praises of the network security company Palo Alto Networks, whose IPO shares soared 36 percent last month. (They’ve since risen to $64, a 52 percent increase over their offering price.)
Given the prescience of some of these calls, Hamadeh and his now 25-employee-strong PrivCo are beginning to look less sensationalistic than they did last year, which must be welcome news for Hamadeh. He’s been single-handedly bootstrapping Privco and says he has already invested “several million” into the not-yet profitable business. (Hamadeh tells me he “may raise outside funding” at some point but “not right now.”)
Then again, he has a history of staying the course and winning big. In 1996, Hamadeh and two cofounders launched the career information site Vault.com. Eleven years later, they sold a majority stake to the private equity firm Veronis Suhler Stevenson for a rumored $60 million to $85 million. (Vault.com had raised roughly $25 million from investors including DB Alex. Brown, Hollinger Ventures, and American Lawyer Media over the years.)
While an undergrad at UCLA, Hamadeh also started what would become a 17-person company that produced course materials for university classes and that was bought by a local print shop for “enough to pay for graduate school,” he says. (Hamadeh enrolled in Wharton’s JD/MBA program at age 22. He says he started work on Vault.com the day after he graduated.)
Asked why Hamadeh is still working so hard (he’s often at the office until past midnight, say colleagues), Vault.com cofounder Mark Oldman, who stayed on at the Vault.com with Hamadeh until mid-2008, calls him a “very sharp, very focused…workaholic” and an “information junkie.”
Hamadeh also seems to have a penchant for nice things, which may partly explain why he’s pouring much of his time into making PrivCo a success. His 3,715-foot Gramercy loft, which reportedly features 11-foot ceilings and keyed elevator access — along with works by Keith Haring — is nice enough that it’s been used to film episodes of “Gossip Girl” and “Law & Order.”
Hamadeh also executive produced a movie in 2009, starring actress Bijou Philips, and regularly hosts benefits in his home. In 2010, for example, he hosted a party in his home for a congressional candidate; his cohosts were the serial entrepreneurs Jack Dorsey and Sean Parker. Next month, Hamadeh is hosting a fundraiser for Joseph Kennedy III, who is running for Barney Frank’s seat in Massachusetts. (Suggested contributions range from $250 to $1,000.)
Hamadeh shrugs off talk about what makes him tick, crediting his rise to the employees he has hired — people, incidentally, who Hamadeh strongly “discourages” from listing their employer on LinkedIn, calling the service “a poacher’s dream.” But he also calls PrivCo one of the “great joys” of his life.
If he manages to keep making the calls that he has — and handles the inevitable bad ones well — it may be the source of his next fortune, too.
Photo: Image courtesy of PrivCo.