Facebook investors are keeping a watchful eye on the social media firm's recent stock rebound.
While the big investment success went to the venture capital firms that invested early in Facebook, later-stage investors are in luck — if they are still holding their stock.
Facebook Inc., which had its initial public offering in May 2012 at $38 per share, saw its stock hit a low of $17.73 in September, but recently has climbed back to trade around its offering price.
“For some, it was a once-in-a-lifetime lottery ticket. Accel (Partners) made a fortune,” said David Fann, president and CEO of private equity consulting firm TorreyCove Capital Partners LLC, La Jolla, Calif.
For venture capital that invested in Facebook after the earliest managers such as Accel, and before Microsoft Corp.'s 2007 investment, it was not a blockbuster deal. Still, “they are in positive territory,” said Michael Kelly, managing director at alternative investment consultant and money manager Hamilton Lane. Bala Cynwyd, Pa.-based Hamilton Lane had investments in Facebook indirectly through its funds of funds.
Alternative investment managers that bought into Facebook closer to its IPO, such as buyout firm Elevation Partners and private equity firm DST Global, are in luck if they held onto their stock to take advantage of the current price increases.
Some investors likely received stock as a portion of the distributions of profits from their alternative investment managers, Mr. Kelly said. Those distributions added to the stock's prominence in institutions' equity portfolios.
Altogether, pension funds owned about 2.03% of Facebook shares on June 30, up 71% from three months earlier, according to Bloomberg data. Much of that growth was due to an increase in Facebook's position in market indexes as previously locked-up IPO stock was released into the market.
Facebook's weight within the Russell 3000 index increased significantly because of those newly released shares, Tim Benedict, a New York-based spokesman for Russell Investments, said. When the index was reconstituted on June 28, Facebook's weighting increased to 0.23% from 0.059%, he said in an e-mailed response to questions.
The Florida State Board of Administration's exposure grew 75% between the first and second quarter of this year to 2.91 million shares, primarily because of the change in the weighting, according to John Kuczwanski, communications manager for the $168.1 billion board in Tallahassee.
The California State Teachers' Retirement System, West Sacramento, also saw its Facebook stock holdings rise 75%, to 2.97 million shares, because of the index change, said spokesman Ricardo Duran.
Facebook holdings of the California Public Employees' Retirement System, Sacramento, rose 53% to 4.2 million shares in the first quarter because of a change in the pension fund's custom benchmark, according to Joe DeAnda, spokesman for the $263.2 billion pension fund. As of June 30, CalPERS held 4.24 million Facebook shares.