Did Interpublic cash in on some of its Facebook stake too early? That appears to be the case now that details are beginning to emerge for the alpha social network’s much anticipated initial public offering next year. According to a report in Monday’s edition of The Wall Street Journal, Facebook will make its IPO early next year -- sometime between April and June 2012 -- and it plans to sell public shares that would raise $10 billion in cash and set a market capitalization of about $100 billion, making it one of the biggest publicly traded companies in the world.
That capitalization would be double the $50 billion Facebook valuation that Interpublic cashed half its original stake in for last summer. In a filing with the Securities and Exchange Commission on Aug. 15, Interpublic said it sold approximately half its Facebook stake in a private placement to an undisclosed entity for $133 million in cash. Based on simple math, that same stake would have been worth about $266 million next spring.
On the plus side, Interpublic retained half its original position in Facebook, which was believed to represent just under a 0.5% of the company, meaning that Interpublic still has significant upside for a small investment it initially made in a fledgling, primarily college campus-based social network in 2006.
Based on what it has already cashed in, and what next spring’s valuation is projected to be, the total value of Interpublic’s stake in Facebook would be nearly $400 million. If it had waited until next spring, the same stake would have been worth more than half a billion dollars.