One of Facebook's earliest investors has sold around $400m worth of shares in the company – which has seen its value halved since going public in May this year.
PayPal co-founder and Facebook director Peter Thiel and his venture capital firm, Founders Fund, cashed out most of his stock (about 20 million shares) in the dominant social network, according to a US Security and Exchange regulatory filing.
When shares in Facebook hit a new low late last week, Thiel was busily selling his stock at average prices ranging between $19.27 and $20.69.
He was able to offload the shares immediately after the so-called lock-out period for inside investors had ended, allowing them to trade stock for the first time since Facebook's troubled initial public offering, when Thiel bagged around $640m after selling 16.8 million shares.
Some unkind folk might consider that Thiel was simply turning his back on a turkey. That said, in two days of selling he did see his initial investment in the network balloon from the $500,000 investment he initially sunk into the social network in 2004. That investment netted the billionaire entrepreneur a 10 per cent stake in the company, which was later reduced to 3 per cent because of dilution and private Facebook shares sales. If you tack on the $640m to the $400m he just made after the lock-out ended, that's a $1bn return on a mere $500k...
Regulatory files also revealed that other early backers of Mark Zuckerberg's Web2.0 baby were also dishing out shares in the network.
Accel Partners scattered nearly 58 million Facebook shares to its investors in last week.
Meanwhile, shares in Facebook closed at $19.99 on Nasdaq on Monday. The company floated on 18 May with an initial IPO price of $38, but its value is now 50 per cent less than it was just three months ago. To put this in perspective, the social network's still worth roughly the same as UK retail monster Tesco, which has real-world assets such as shops, trucks and stock. ®