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Microsoft CEO Steve Ballmer gets a lot of criticism, some deserved, some not.But he made at least one decision that now looks to be pure genius.
Back in 2006, Microsoft took a $240 million stake in Facebook. It also gave Facebook an implied value of $15 billion, which made a lot of people laugh at the time.
Who’s laughing now?
Later this month, Microsoft will sell 6.56 million shares of Facebook as part of the company’s IPO. Those shares are expected to fetch between $117 million and $230 million.
It will still hold 26.2 million shares. Assuming Facebook prices near the top of its IPO range, those shares will be worth more than $900 million.
So Microsoft made back its money 5x in less than six years. That’s not quite the 10x exit most VCs are looking for, but it’s still a pretty great return for Microsoft.
It also gives Microsoft some influence in the most important consumer web company of the next few years.
It’s sure a lot better than the near-miss acquisition of Yahoo that Microsoft tried to make a couple years later.
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