Software giant Microsoft Corporation (NASDAQ:MSFT) sold about 20 percent of its share it held in from Facebook Inc(NASDAQ:FB), in the latter's IPO in May, according to the Associated Press.
The AP report gave a list of the early investors who had sold during the IPO and Microsoft figures as one of the investors who offloaded the shares. The company had invested about $240 million for 1.60% stake in Facebook in 2007 in lieu of shares. At the time of the IPO it sold 6.6 million shares.
The indication is that Microsoft would have sold at the IPO price of $38 a share for a total value of $250 million, making a neat profit of $10 million on its investment.
Of course there is nothing mysterious about that transaction since Facebook founder mark Zuckerberg himself sold more than 30 million shares in the IPO.
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Whether Microsoft anticipated the fall in share price of Facebook is a debatable point and one only the company can answer. But there is no doubt that it made for a sound trading decision, in light of subsequent developments.
Facebook shares have halved falling to record lows almost every day. A further infusion of shares into the market since Friday through the released of locked-in shares have further put a downward pressure on its share prices.
After the carnage witnessed last week shares of the social networking site were trading up 4.46 percent at $19.90 on Monday on bargain hunting. The shares have recovered from another record low of $18.75.
Microsoft has been a long-time ally of Facebook since its early days. Apart from being one of the initial investors in the company, it has also made available its Bing Search and Bing Maps on the social network.