IPG Sells Stake in FB - Analyst Blog


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Interpublic Group of Companies Inc. ( IPG ) announced that it has sold its remaining stake in Facebook Inc. ( FB ) for $95 million. Earlier, in August 2011, the company had sold approximately half of its stake in Facebook for $133.5 million.

Noted under the Other Income category of the company's income statement, the company recorded pre-tax gain of $94 million in the current sell off. In 2011, roughly $132.2 million was realized as pre-tax gains.

Although the value of the investment increased notably since the time it was made in 2006, management, however, does not consider it a part of the strategic investments of the company any more. The company hasn't yet mentioned the alternatives that can be employed to utilize the gain either. However, the gain recorded in the third quarter of 2011 was used for capital loss carry forwards, which had a 100% valuation allowance recognized on them.

The company also received an approval from the Board of Directors to increase its previously authorized share repurchase program worth $300 million by $100 million. Since its authorization in Feb 2012 till Spetember 30, 2012, the company has repurchased shares worth $151 million. Also, the remaining shares can be repurchased at any time since they have no expiration date. Management considers this program a way to enhance shareholders' value.

Interpublic Group of Companies is the third largest advertising company in the world, offering a range of advertising and marketing communication services. The company competes with other industry players, such as Omnicom Group Inc. ( OMC ), Publicis Groupe SA ( PUBGY ) and WPP Plc ( WPPGY ). The company holds a Zacks #3 Rank, which translates into a short-term (1-3 months) Hold rating.

FACEBOOK INC-A (FB): Free Stock Analysis Report

INTERPUBLIC GRP (IPG): Free Stock Analysis Report

OMNICOM GRP (OMC): Free Stock Analysis Report

PUBLICIS GP-ADR (PUBGY): Free Stock Analysis Report

WPP PLC (WPPGY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: FB , IPG , OMC , PUBGY , WPPGY

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