Interpublic sells half of its Facebook stake

Facebook gets valued at a whopping $65 billion in the deal by US marketing services giant, Interpublic.

The US marketing services giant that owns ad agency networks like Lowe and McCann-Erickson, Interpublic Group (IPG), has sold half of its stake in Facebook for $133 million. The name of the buyer has not been disclosed. A relatively early investor in Facebook, IPG had purchased less than one-half of 1 percent in the social networking website in 2006 as part of a wider strategic partnership.

If the sale price of half of the stake, which is believed to have been 0.4%, is anything to go by, then Facebook gets valued at about $65 billion. At the time when IPG acquired the stake the deal included working with Facebook on pilot marketing programmes including sponsorships, consumer research and content creation on behalf of its clients.

According to Michael Roth, the chief executive and chairman of IPG, the company decided to offload half of its holdings because the ubiquity of Facebook had reduced the strategic value of the investment. However, Roth admits that the value of the stake has skyrocketed. The exact number of shares that IPG is selling is not known, but the company is expected to see a total pre-tax gain of about $132m.

With this stake sale by IPG, the spotlight will be back on to the secondary market for private company stock. The loosely regulated market had attracted scrutiny from regulators earlier this year after shares in Internet companies such as Facebook and Groupon started trading at multibillion-dollar valuations without public listings. Inspired largely by demand for small stakes in the secondary market, Facebooks implied valuation has increased more than fivefold in less than two years.


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