Interpublic Agrees to Sell Half of Facebook Stake for $133 Million

Published by: Mike Goldman on 16th Aug 2011 | View all blogs by Mike Goldman
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Interpublic Agrees to Sell Half of Facebook Stake for $133 Million

New York-based advertising and marketing firm Interpublic Group announced Tuesday it has agreed to sell half of its 0.4 percent stake in Facebook for $133 million.  The company acquired the whole stake in 2006 for just $5 million, when the social network had less than 12 million users and MySpace still ruled the social networking market.  Since then, Facebook has risen to heights never dreamed of by Myspace, and currently has some 750 million active users.

Based on a fundraising round earlier this year led by Goldman Sachs, Facebook's value was at $50 billion, but based on shares traded on secondary markets recently, the company was worth just over $82 billion.  The Interpublic deal values the company in the middle of those two figures, at $66 billion.  Considering that News Corp was only able to fetch $35 million when it sold Myspace in June, $133 million for 0.2 percent of Facebook is quite a haul.

Interpublic CEO Michael Roth said in a press release announcing the deal that Facebook's “ubiquity has meant the strategic value of our initial investment has moderated, while the financial value of that stake appreciated significantly. As a result, when an attractive opportunity to divest a portion of our position recently presented itself, we decided that it made sense to do so.”

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