Peter Thiel dumps Facebook stock

At a time when Facebook shares had halved, bigwig billionaire and Paypal founder Peter Thiel has got rid of the majority of his stock, which may not inspire confidence among ther investors.

Thiel was an early investor, sticking $500,000 into Facebook back in 2004 when the company was relatively in its infancy and valued at just $4.9 million, the Wall Street Journal reports. His return is not bad: Thiel has now made over $1 billion from his initial investment. He held onto stock worth $112 million.

Thiel said that he offloaded 20.1 million Facebook shares and now has 5.6 million left. This latest sell earned Thiel $395.8 million. The WSJ reports that if he had sold these when Facebook went public, valued at $38 per share, Thiel would have brought in $762 million. He will not be crying into his pillow. Thiel already sold some shares before the IPO and 16.8 million further shares at  the time of the IPO for a cool $638 million.

Thiel is an influencer and his offloading of Facebook stock may shiver the timbers of early investors post-IPO. Since going public, Facebook has struggled to convince the market that it has a solid strategy for monetising. Aside from the extremely valuable data Facebook holds on its users, the company’s adverts really are not bringing in the revenues they potentially should.  

Facebook CEO Mark Zuckerberg, meanwhile, is seen as a loose cannon. His despotic, impulsive actions do not give investors much confidence. It is a strength and a weakness. For example, although buying Instagram could be seen as strategically significant, the price tag was high for a company which, itself, was struggling to monetise.

Shares have plummeted since the original IPO. What’s next for Facebook is not clear, at this sensitive time, although we would not be surprised if – behind the scenes – stockholders will be whispering for a steadier pair of hands at the wheel.