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Facebook Insiders Cash Out

Early investor Peter Thiel and Facebook co-founder Dustin Moskovitz both dumped shares after the first lock-up period expired.

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It's selling time for Facebook insiders.

Both early investor Peter Thiel and co-founder Dustin Moskovitz have unloaded shares in the social media company, according to [[SOURCE]].

August 16 marked the expiration of the first of Facebook's five different lock-up periods, which prevent employees and other insiders from selling their shares for a period of time following an IPO. The expiration of the first lock-up freed up 271 million shares, allowing original investors (aside from Mark Zuckerberg) to sell. Thiel sold about 20 million shares priced between $19.27 and $20.69--nearly half of the stock’s value when it first went public [[SOURCE?]]. The sale was part of a trading plan Thiel adopted just before Facebook went public, according to CNBC.

The former PayPal CEO invested $500,000 in Facebook in 2004. According to USA Today, Thiel made $396 million from the sale. He also sold 16.8 million shares in the IPO, netting $640 million.

Thiel isn’t the only early investor cashing out. According to CNET, Moskovitz--who held the third largest stake in the company at 7.6% behind Zuckerberg (28.2%) and Accel Partners (10%)--also sold shares. Zuckerberg's old Harvard chum unloaded 450,000 shares and converted 7 million Class B shares to Class A shares. The move takes away some of Moskovitz’s voting power but will let him sell the shares. According to the SEC filing, Moskovitz made $9 million from his sale.

Many speculate that when the next Facebook lock-up expires in October (opening up 247 shares belonging to Facebook directors and employees) the company’s stock could take another substantial hit. Meanwhile, Groupon, which has lost 75% of its value since going public in November, has seen four of its earliest investors cash out recently.

IMAGE: Flickr/Fortune Live Media
Last updated: Aug 23, 2012




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