CEO of Netflix Buys $1m of Facebook Shares
While there has been a lot of negative press over Facebook shares, it seems that not everyone has lost faith in the social network. Last Friday Facebook disclosed that Reed Hastings, the Chief Executive of Netflix, has bought $1 million of Facebook stock.
A filing with the Securities and Exchange Commission shows that Hastings bought 47,846 Facebook Class A stock at an average price of $21.03 per share. The news prompted a rise in the value of Facebook shares which closed on Friday up 3.79% at $21.81.
In May Facebook because the first American company to debut with a value of over $100 billion. However, since then shares have steadily dropped and they it is currently down about 43% from its peak. This has reduced the company’s market cap by over 50% to around $46 billion.
When Hastings joined the Facebook board in June 2100 he received 20,000 restricted stock units. However, these shares have not yet vested which means that Hastings is the only Facebook insider who has disclosed buying stock and purchasing a stake in the company. However, to date Hasting has declined to comment on his purchase.
Microsoft has also announced that it intends to keep its stock once the ban on Facebook share sales ends next week. Microsoft reportedly views the stake as a strategic investment and intends to keep their shares as a way to combat Google rather than as a short term way to make money.
Microsoft owns 26.2 million Facebook shares, or 1.7% of the company, which are worth almost $572 million. It bought the stake in 2007 for $240 million which means that regardless of the drop in value of Facebook stock, Microsoft has still done extremely well on its investment. It may also be worth noting that Hasting also serves on the board of Microsoft.