Interpublic Group sells half its stake in Facebook
IPG invested in Facebook in 2006, two years after the social network was founded. Michael Roth, chairman and CEO of IPG, said in a statement that the company's investment had outlived its “strategic value.”
“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 Roth, in a statement. "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.”
Tom Cunningham, VP of corporate communications at IPG, said the company will use its profit from the sale to increase its share-repurchase program. The holding company will increase the value of its share-repurchase program to $450 million from $300 million, it said in a statement on the sale.
Cunningham said the holding company would have no further comment on the timing of the sale.
Facebook is planning to go public early next year, according to CNBC, which valued the Palo Alto, Calif.-based company's IPO at $100 billion in one report. Speculation about Facebook's IPO has also fueled debate about whether the market is in the midst of another tech bubble, reminiscent of the dot-com bubble that burst in 2000.
IPG reported $1.74 billion in second-quarter revenue, with net income up 31% to $109 million after a first-quarter net loss of $53 million.