14 DAY TRIAL // Nobody is surprised that Facebook stock is hitting new lows, especially since it was known that employees and early investors would be able to start selling theirs last week. Stock price being based on herd mentality above anything else, people just can't wait to pound some more on the same company they were praising just a few months ago.
But you'd expect that from regular investors and you'd expect employees to sell at least some of their shares, even if the price is rubbish, after waiting so many years to do so.
You'd think though that the more savvy investors, at least the early ones, would be a bit more cautions or more patient and wait a couple more months for the stock price to bounce back. After all, for an investor with hundreds of millions of dollars in shares, even a $1 bump adds up to a significant sum.
And it wouldn't be too surprising to see Facebook share price hit $25, €20 three months from now even if it's now languishing at around $20, €16.21 and went way below that, hitting $18.75, €15.19 at the rock bottom.
Or maybe Peter Thiel knows something we don't, since he's dumping his significant chunk of Facebook stock. He sold about 72 percent of the shares he personally owns last week, about the time shares hit the lowest price. Thiel also controls Founder Fund's much larger stake in the social network.
He sold a big chunk of his shares and shares he controls via his holding companies during the IPO and had previously sold about half of his shares to the Russian DST group. Overall, he's made over $1 billion, €810 million from his investment in Facebook and still personally owns more than $100 million worth of shares.
Thiel was the first Facebook investor putting in $500,000, €405,000 in 2004 in return for 10 percent of the company. Needless to say, he got a nice return on that half a million dollars.
Him selling so many shares will only lead to more investor panic. Which may actually be warranted as he's not exactly a reckless investor and is rather prudent with his money. However, the plan to sell the shares at this time had been arranged in advance, on the day of the IPO. It's unclear though if he had the option of not going ahead with the plan.