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Rating:Mutual Fund PMs Won't Sweat the Facebook Dip Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, May 22, 2012

Mutual Fund PMs Won't Sweat the Facebook Dip

News summary by MFWire's editors

Facebook's share price fell on Monday to $34.03, from its $38 IPO price on Thursday, yet analysts say big mutual fund families like Fidelity Investments [profile] that invested in the social networking company before it became public are likely still winners, Reuters reports.

John Bonnanzio, Fidelity Insight editor, said most of these funds bought shares for less than $38 per share, through secondary markets, when the company was still private.

Based on Bonnanzio's estimate, $200 million in Class B shares bought by 24 Fidelity large-cap stock funds were then priced between $25 and $35 per share.

T. Rowe Price [profile] and Morgan Stanley, also big backers of the social networking company, bought their shares before it went public. Based on a recent filing by Facebook, T. Rowe had more than 18 million shares, or about $630 million, at a share price of $35 as of March 31.

The Pax World Fund [profile], run by Chris Brown, was able to purchase 420,000 Facebook shares through Secondmarket at a price "in the low 30's" in April before the IPO.

Brown said he still has confidence in the long-term prospects of Facebook despite the Monday dip. 

Edited by: HFD


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