Just 0.2% of Facebook flogged for $133m
Means it's worth 20% of Apple ... or ALL of HP
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Ad firm Interpublic has sold half its stake in Facebook for $133m.
The firm's stake was 0.4 per cent, so the sale gives an apparent value for the whole social network of $66.5bn.
The deal was done back in 2006, when Facebook needed revenue and respect. Interpublic agreed to spend $10m of its clients' money on advertising on the site and in exchange was allowed to buy a 0.4 per cent stake for less than $5m, the FT reports. Interpublic brands include McCann Erickson and Lowe + Partners; the firm turned over $6.5m last year.
Interpublic's statement did not reveal who had bought the stake but the pink paper said it was not Facebook itself – which has first refusal in such deals.
The ad company said it would pocket $132m from the deal.
Chief executive Michael I Roth said: "Interpublic formed a strategic relationship with Facebook in 2006 ... 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."
Interpublic's full statement is here. The company will use the cash to buy back its own shares. ®
COMMENTS
pflat - The article has been edited
pflat, your comment was made after the article was edited/corrected but before the post pointing this out was deleted!
So the post was correct at the time it was written...
Your apology is gratiously accepted - thank you!
It does not mean the value of Facebook is $66.5 Billion.
It means with shares being that limited, 0.2% of Facebook is worth $133 million. When more shares come on the market, the value per share will drop. That why they bring in special accountants to value tightly held companies - you can't do simple maths to find the value of the company. And yes, I don't really trust the special accountants, but they are the best we can do at the moment.
Financial Reality
Of course - clever software by itself doesn't make any money. How often have we seen the technically inferior product become more successful? Facebook is a business not a research agency.
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