Wednesday, August 15, 2012

Facebook Inc (NASDAQ:FB) Extends Fall, Thiel’s Stake In Focus Ahead of Lock In

Peter Thiel, a director with Facebook Inc (NASDAQ:FB) and one of its earliest investors, has enabled himself with more flexibility to sell off his holding in the company, according to a document filed with the Securities and Exchange Commission on Aug 10.

Thiel, who is a venture capitalist and a hedge fund manager, holds about 27 million shares of the company worth more than $550 million. At the Facebook IPO in May, which attracted a lot of attention chiefly due to the mess it created, he sold 16 million shares netting more than $630 million from it.

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Recently he converted more than 9 million shares to Class A from Class B, paving the way for easier exit from his holdings since Class A shares can be traded more easily than Class B shares.

More than 2 billion Facebook shares will become available for release when their lock-in expires on August 16, as per a pre-arranged plan by the company.

Thiel's action has already created jitters among Wall Street watchers who feel that if Thiel is planning to cash out then others could also follow suit.

“It’s certainly not a vote of confidence when a guy who knows as much about it as Peter Thiel knows about it wants to get the rest of his stock into a position so that he can sell it quickly,” Erik Gordon,  a professor at the Ross School of Business at the University of Michigan, told Bloomberg.

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Facebook shares have lost nearly half of their value from its IPO price of $38 a share, as investors, plagued by doubts about its continued growth prospects have been dumping it.

The company is now moving to mobile advertising where a significant portion of its subscribers are now residing, though mobile ads revenues are lower compared to traditional display ads.

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