Monday, 10 September 2012

The Norwegian Government Pension Fund Global to sue Facebook

Hegnar.no, the Norwegian financial news website, says the Norwegian Government Pension Fund Global (GPFG, the Norwegian sovereign pension or wealth fund) is to sue Facebook after having lost USD 50 million on the investment. According to Bunny Nooryani, spokes woman at the fund,
We usually do not comment on individual investments, but we generally believe that it is unfortunate that companies have schemes that discriminate against shareholders. We want each share to carry one voting right.
Well, that information was available at the time of the IPO, so if they believed the voting structure discriminated against shareholders then they simply shouldn't have bought the shares!

As previosly reported on EcPoFi, the Facebook share was not a prudent investment, not at the USD 38 IPO price and not at its current price of around USD 19 per share. We have previously also reported that The Norwegian Government Pension Fund Global gambles with a portion of Norway's wealth through buying Facebook shares.

Instead of the GPFG suing Facebook and wasting even more of Norway's wealth, Norges Bank (the central bank of Norway) and the Ministry of Finance should instead scrutinise the investment routines at the Norwegian pension fund and ask some tough questions for its CEO, Yngve Slyngstad, and Petter Johnsen, CIO Equities, about what in the world they were thinking when allocating such a huge amount of money in the Facebook IPO (0.1% of the IPO market cap).

We can only wonder in what other areas the fund is not investing prudently to "safeguard Norway’s wealth for future generations" (see here).

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