Facebook Inc (NASDAQ:FB) plunged 3.71% as the director of the social network site, Peter Thiel unloaded majority stake in the company.
Thiel has sold about 20.1 million shares which brought about value of $395.8 million on Aug. 16 and Aug. 17. The shares had been up 3.5% last day after creating new low because of the heavy selling on the release of the first lock up period. Total proceeds from the Facebook stake have become more than $1 billion. $640.1 million had been generated from the sale of shares during the Company’s IPO in May, 2012.
Peter Theil is a venture capitalist and has been one of the very first backers, Thiel is one of the biggest beneficiaries of Facebook’s gain before going public. His investment had stood at $0.5 million.
The new low in the last week had been created when the Company’s first lock up period had expired. The investors had on the very first chance of being freed of the lock up had started selling their shares in bulk in the market which pulled the share prices to new 52-week low. By selling out their shares at such lower prices compared to the IPO price of $38, the investors still had benefitted as the Company’s near future seems bleak to the wall street, analysts and investors.
The stock has been hit by worries about the company’s ability to grow revenue. After making an overpriced IPO at $38 the shares have plummeted 47.63% till date.
However, analyst at Capstone Investment have reiterated price target of $26 for the social media showing confidence on the Company’s core business and potential returns from new businesses. Revenue from ads has grown in the last quarter with revenue from the Company’s sponsored stories adding to the revenue source.