Suit Alleges Interpublic Exited Facebook $381.1 Million Richer, Claims Most Of It
Update: Interpublic denied an allegation in a suit filed by a former executive that it sold the remainder of its shares in Facebook following the social network’s initial public offering in May. “I can confirm that we have not sold any portion of the remainder of our take in Facebook,” an Interpublic spokesman said in response to an Online Media Daily report citing the allegation in a suit filed by former Interpublic executive Ray Volpe that Interpublic sold the remainder of its Facebook shares for $249.6 million on May 18th, the day Facebook went public. Under the terms of its original 0.4% investment in Facebook, Interpublic is required to file a public disclosure if and when it sells any “material” amount of its position in Facebook, though it could sell off small amounts over time without publicly disclosing it. In a private transaction in August 2011, Interpublic sold half its original stake in Facebook for $133.5 million.
Early Facebook investor Interpublic sold the remainder of its shares in the social network for nearly $250 million when it went public May 18th, according to a lawsuit filed by a disgruntled former Interpublic executive claiming he is entitled to be paid for his role in convincing the agency holding company to invest in the company.
While Interpublic hasn’t officially disclosed the sale of its public Facebook shares, when combined with the $135 million it previously made selling half its original Facebook stake in a private deal last year, brings total proceeds from the investment to $383.6 million, or a 15,244% return on its original investment of $2.5 million of a 0.48% stake in Facebook in 2006.
In a suit filed in New York State Supreme Court, former Interpublic executive Ray Volpe claims he is entitled to $381 million from Interpublic for his role in convincing the holding company to take an early stake in Facebook.
Interpublic claims the suit is without merit, because its Facebook stake was entered into at the corporate level.