Group sells tiny stake in Facebook for $133M cash

Ronny Kerr · August 15, 2011 · Short URL:

Advertising and marketing company Interpublic sells its tiny stake for a massive profit

Interpublic Group announced Monday that it has agreed to sell about half of its holdings in Facebook for $133 million in cash. The private sale is expected to earn Interpublic a pre-tax gain of $132 million.

The buyer in the deal was not disclosed.

Either way, that’s a pretty profit on the sale of a stake amounting to less than half of a percent. But this is Facebook we’re talking about. The sale gives Facebook a valuation of $66.5 billion, according to FT also has sources saying the buyer today was not Facebook.

A New York City-based provider of advertising and marketing services, Interpublic is the parent company of several agencies, including McCann Erickson, Draftfcb and Lowe + Partners.

"Interpublic formed a strategic relationship with Facebook in 2006 that allowed us to fast-track the growth of our social media offerings on behalf of clients," said Michael I. Roth, Interpublic's chairman and CEO, in a release.

"Facebook has since become a part of daily life for hundreds of millions of people around the world. Its 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.”

The sale, which involves the most hotly valued private tech company, once again returns the spotlight to the secondary markets, which have come under increased scrutiny since at least the beginning of this year, when the Securities and Exchange Commission (SEC) opened up an investigation.

Last week, reports circulated that the SEC is actually considering proposing new regulations on the secondary markets as early as this fall.

And, besides the SEC, sources say private companies like Twitter, Square and LivingSocial are all taking steps to discourage or prevent shareholders from unloading their stock before the companies go public.

No word on whether Facebook has taken any such steps.

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