Microsoft will likely keep its Facebook shares

Facebook launched its heavily hyped IPO in May but since then the stock price for the social networking service has taken a beating. Shares in Facebook ended trading on Friday at $21.81 a share, well below its start price of $38. In the last three months, Facebook's value has gone down by nearly 43 percent.

One of the biggest owners of Facebook stock is Microsoft. The company secured an investment in Facebook back in 2007 for $240 million and now owns 26.2 million Facebook shares. That amounts to Microsoft owning 1.7 percent of Facebook for a current stock value of $571.9 million.

Since Microsoft's investment deal with Facebook, the two companies have collaborated on a number of projects, such as integrating Facebook posts in the search results for Microsoft's Bing service. Microsoft also sold 650 patents it recently acquired from AOL to Facebook for $550 million.

On August 16th, a moratorium for selling off shares for large stake holders in Facebook will come to an end. Despite Facebook's much lower stock price, Bloomberg reports, via unnamed sources, that Microsoft intends to keep its shares in Facebook next week.

However, other people with Facebook shares may not be as kind as Microsoft. The story claims that Facebook's Chief Financial Officer David Ebersman was meeting in New York City with a number of Facebook stock owners, most likely trying to convince them not to sell off their shares on August 16th.

Source: Bloomberg.com

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8 Comments

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Perhaps they should buy some. Facebook integration with Bing is a good step in the right direction. I'd like to see what Bing could be with more Facebook integration.

Of course, I'd like MS to buy out Facebook. But that's me.

Why would Microsoft sell at the low point? They don't need money, obviously, which would be the only reason to sell right now.

evacc44 said,
Why would Microsoft sell at the low point? They don't need money, obviously, which would be the only reason to sell right now.

I don't think they want to throw money away either. They would sell if they think FB won't gain traction in the market.

Well I'd laugh if everyone DID sell their stocks in it, but hey, MS has gained money with the investment anyway.

nickcruz said,
It's premature to sell facebook shares at this time but then again, we have long term and short term investors.

Microsoft should hang onto theirs, but in reality facebook shares were only ever going to be worth $10-$12 (which I've been saying since they launched), so they still have a way to fall.

I'm not even sure facebook will be around in 10 years. The other thing I've been saying since their launch, was that they IPO'd at their peak (in popularity) and are now starting to become yesterdays news.