Ever since Facebook became a public company, the social network has run into troubles. Its stock value has dipped considerably and there is a fear that the investors will soon start shedding the shares. Peter Thiel seems to be the first to drop out, having shed majority of his Facebook stocks worth $400 million.
Thiel has been one of the major support Facebook has had since the very start. He’s the first outsider who lent Facebook the initial capital in its early days to transform from a college-dorm venture to a full-scale organization.
Thiel is the cofounder of PayPal and has been on Facebook’s board since 2005. When Facebook went public, Thiel actually had 2.5 percent stake in the company. Back then, Thiel was quick to sell some 16.8 million shares but retained the other 27.9 million shares. It may seem that the considerable dip in Facebook’s stock price has worried the popular entrepreneur.
On August 16, Thiel sold another 20,058,068 of his Facebook shares, earning him a cool $400 million as a payout. Naturally, this may worry many Facebook investors since Thiel is the person who has been on Facebook’s side since the very start. So if such an ardent supporter of Facebook is jumping off ship, it will surely trigger panic among other shareholders.
On Aug 16, the first lockup period of Facebook’s stock ended; i.e. pre-IPO investors were finally eligible to trade their Facebook stocks in public. Given the cashing out of one of Facebook’s first outside investor and member of the board, the company will be under pressure of more follow suit.
The big question is, will Facebook be able to handle all this pressure and continue being profitable at the same time. The key to this conundrum seems to lie in its ability to generate revenue from the mobile platform.
Courtesy: Venture Beat