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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