* Fidelity, T. Rowe Price funds bought on secondary market
* Fidelity paid $25 to $35 per share - analyst estimate
* Funds could be buying more shares on Monday
By Ross Kerber
May 21 Fidelity Investments and other big mutual
fund families that were early backers of Facebook Inc are
likely still winners despite the social network's troubled stock
Facebook shares were initially priced at $38 per share on
Thursday after the market closed. Despite an initial bump, they
have since fallen and were trading around $34 a share on Monday
afternoon. That led to much hand-wringing among technology
investors who had expected a bigger boost for the widely-used
But don't cry for the mutual funds, said John Bonnanzio,
editor of the Fidelity Insight investor newsletter. Many funds
bought Facebook shares last year, while the company was still
private, on secondary markets for considerably less than $38, he
For example, about 24 Fidelity large-cap stock funds bought
over $200 million worth of Class B Facebook shares at between
$25 to $35 from March to May of last year, Bonnanzio estimated.
Class B shares have more voting rights than the Class A shares
sold in Facebook's IPO, but convert into the same number of
Class A shares when they are next transferred.
Along with Fidelity, T. Rowe Price Group of
Baltimore and Morgan Stanley's asset management unit were
also big buyers of Facebook shares before the company's
long-awaited initial public offering, according to securities
Most of the funds would still be above water despite
Monday's decline, Bonnanzio said. That also assumes the funds
were not tempted to buy more shares at $38 in the IPO deal.
Or, funds, could even be buying on Monday as the shares
dipped. "If they are true believers, one would have to assume
they are buying more" shares of Facebook today, Bonnanzio said.
Facebook makes up just a tiny portion of the portfolio of
big mutual funds that bought last year. Fidelity's well-known
Contrafund, for instance, has total assets of $84.2 billion
according to Morningstar. The fund's most recent filing, dated
March 30, shows holdings of $106.6 million in Facebook -- just
0.127 percent of the fund's total net assets at the time.
Fidelity spokeswoman Sophie Launay declined to comment.
T. Rowe Price held more than 18 million shares of Facebook
as of March 31, according to a recent Facebook securities
filing. Based on a share price of $35, T. Rowe's stake would be
worth about $630 million.
T. Rowe Price spokeswoman Heather McDonold declined to
Funds were able to buy the shares on secondary markets, such
as SharePost or Secondmarket, which arranged for Facebook
employees to sell their personal shares before public trading