Harvard Endowment Buys Stake in Zuckerberg’s Facebook

Harvard University’s endowment has made a small investment in Facebook Inc. (FB), the social-networking service that got started on its campus by Mark Zuckerberg.

Harvard Management Co., which runs the endowment for the world’s richest college, held 20,000 shares at the end of June, according to a regulatory filing. Based on yesterday’s close of $21.81 in New York, the stake would be valued at $436,140.

Zuckerberg, chief executive officer, has been under pressure from investors since the company went public in May as concerns persist about its growth prospects. Facebook, challenged by a shift of users to mobile devices, reported slowing sales growth in the second quarter. Its shares have dropped 43 percent since the initial public offering price of $38.

Facebook raised $16 billion in the May offering, the largest ever for a technology company. Yet its debut was marred by technical glitches, and the stock only managed to close above $38 on the first day of trading.

Sales grew 32 percent in the second quarter, a slowdown from 45 percent in the first and 88 percent for 2011. While Facebook needs to boost revenue by drawing more advertising from mobile devices, it only rolled out its first ad platform for smartphones in March.

Harvard Money

Aside from Facebook, Harvard Management’s other new investments included two online Chinese companies, Ctrip.com International (CTRP), an online travel company, and Sina Corp. (SINA), operator of the Twitter-like Weibo site. Harvard Management had $31.7 billion under management with an investment return of 21 percent in the year ended June 2011.

Zuckerberg, 28, started Facebook with fellow Harvard students in 2004 in their college dormitory room. He rolled out the service to other campuses before making it available to the general public. With almost 1 billion members, Facebook is now the world’s top social-networking site.

Zuckerberg, who dropped out of college to devote his efforts to Facebook full time, returned to Harvard late last year to recruit for his company. The university called it his first official return since he left in 2004.

-- Editors: Reed Stevenson, Stephen West

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net