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Swedish wealth fund, Sjunde AP-fonden buys Facebook Shares

Wednesday, 16 May 2012
Swedish pension fund, Seventh AP Fund has bought into in Facebook, expecting to invest Skr400 million in the social network company when it will begin trading on the Nasdaq exchange in the U.S. at the end of the week.

Although leading advertisers on the site such as GM are pulling out, questioning the power of the social network in generating the type of wealth being talked about, Facebook is still assessed to be so big that it has an impact in various indices, and it is very likely that “we follow the index,” said Svante Linder, general manager of the Swedish wealth fund, Seventh AP Fund, to Swedish daily, Dagens Nyheter.

Linder compares the scenario with Apple which the Fund invested Skr 2 billion.
In addition to the 2.7 million Swedes, who did not choose the fund but who are strong IT users and ended up in the Seventh AP Fund, those who actively chose funds with a focus on IT and North America will share in Facebook share ownership.

Pension Company AMF would not comment on possible purchase of the shares in the company. “Facebook is a great company, but the business model is still a bit untested, so it's a bit of buying dreams. In order that the valuation should be kept in tact, a long-term is needed for everything to right,” says Magnus Sj÷berg, who is the manager of  equity fund North America, told Dagens Nyheter.

Fund expert Jonas Lindmark urges caution and advises to let the first baiting around the company fold, only to see at what level the stock price fall.

Facebook will increase the volume of initial public offering of 85 million shares at around 422 million, said an informed source to Reuters. Facebook had initially planned to sell 337.4 million shares.

Previously, the company announced that the subscription price of shares was to increase from a previous price range of 28 - 35 dollars per share to the new price is 34 - 38 dollars.

With an average price of $36 it would mean that the increased volume mean the listing gives the company an additional $15.2 billion.
By Team

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