T. Rowe Price disclosed Friday that nineteen of its mutal funds hold shares of Facebook worth $190.5 million. While it is not unique for a mutual fund to hold shares of a private company, this could tell us something about Facebook's plans for an IPO.
According to Russel Kinnel, Director of Research at Morningstar, mutual funds are more likely to invest in an established company with a short term horizon of going public than sit on a long-term venture capital type investment. T. Rowe Price likely believes that Facebook is headed for an IPO sooner rather than later.
It's also interesting for the average "Joanne" that wants to get in on what could be a hot IPO. At about 0.35 percent of the assets in the funds named below, it's not a large position, but it's a position.
The big question will be valuation — how will these shares be valued or, revalued in T. Rowe's quarterly reports? History suggests they could be carried at purchase price says Kinnel. Which means we could find out how much T. Rowe paid for the shares once the company files its second quarter report with the Securities and Exchange Commission.
Here are the 19 T. Rowe Price funds:
Sciences & Technology
New America Growth
Media & Telecommunications
Growth Stock Fund
TRP Institutional Large-Cap Growth Fund
New America Growth Portfolio
Tax-Efficient Equity Fund
Growth & Income Fund
Blue Chip Growth Fund
Blue Chip Growth Portfolio
Institutional Large-Cap Core Growth Fund
Personal Strategy Balanced Fund
Personal Strategy Growth Fund
Personal Strategy Income Fund
Personal Strategy Balanced Portfolio
Global Stock Fund
Institutional Global Equity Fund
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