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Peter Thiel Sells Majority Of His Facebook Shares In Deal Planned Pre-IPO

108 points by nikhilpandit 14y ago

grandalf 14y ago
I'm going to buy when it gets closer to $10 per share. Half the world uses Facebook every day so let's not pretend it isn't an awesome business with utterly massive potential.
- joelrunyon 14y ago
  "awesome business" and "massive potential" aren't mutually exclusive events. It can have massive potential, but never deliver and still be a terrible business. Sure, it's got a lot of upside if you can buy it at the right price, but up till now, it hasn't shown advertisers (who make up the majority of their revenue) that it can deliver customers as acceptable CPAs. Until that happens, we'll still be waiting for facebook to be an "awesome business."
  - grandalf 14y ago
    I don't think CPAs are the right metric. Facebook is massively engaging. I think TV is the most natural synergy b/c people socialize around it today but only in one household. Facebook should also launch a web search similar to Google just go capture some market share in search-driven advertising. Around the world, Facebook is the fastest loading website (it often beats Google). Its infrastructure is ready to make a truly global play of some kind. Expect something huge after the stock price stabilizes a bit.
    - bunderbunder 14y ago
      Perhaps CPA is not the right metric. But a bunch of hype that glosses over the fact that Facebook doesn't really actually make very much money is not the right metric, either.
      - chii 14y ago
        But i thought facebook's revenues are in the billions? Where is that money coming from?
        joelrunyon 14y ago
        A little over 3.5 billion. I think he was saying that the revenue considering the company size and user base (almost 1 billion) is not very much.
        bunderbunder 14y ago
        Yup. Especially considering their revenue has also been falling, that there are concrete reasons to think that it will continue to do so, and that they're operating in a notoriously brutal and fickle space. There's money there, but not enough to cushion a fall.
    - nazgulnarsil 14y ago
      if TV is the model facebook should acquire synchtube.
      - samstave 14y ago
        Facebook should sponsor and create content viewing events that are only visable via facebook. What if there was a "real world FB" where FB users live together and drama ensues - and the only way to watch it is FB.com. There are so many other things that FB could do to truly be a platform: Education via FB, Work via FB (think having a mechanical turk via FB where users could sign up to be a part of the service and use the FB platform to earn money), videoconference within FB, etc etc etc.
    - joelrunyon 14y ago
      If CPAs aren't the right metric, you still need to find a better metric to convince advertisers it's worth it. And I think the "look how many users we have!" metric is going away quickly.
    - slantyyz 14y ago
      Facebook is massively engaging, but the ads they allow to appear on the site are incredibly off-putting. I personally don't mind ads on sites, but the Facebook ads that I'm fed all appear to be for slimy businesses (I'm constantly seeing ads for Canadian Pardons that are using what I believe to be unauthorized images of celebrities) or have seemingly low-to-no production values. They need to fix or curate the way ads are displayed, because I think it will eventually become a hindrance to their success.
- batgaijin 14y ago
  See, I hate arguments for this. How many new accounts did you create annually 10 years ago? How many new accounts did you create annually 5 years ago? How many new accounts did you create this year? People don't mind switching, and in fact they don't mind having simultaneous accounts. People on this forum think that they are 'special' inasmuch they don't mind negotiating multiple accounts with relative ease, but it's an inevitable tactic. Facebook can be used to login to other sites, but with Google+ and Twitter and the $20 share price, nobody small wants to bet on Facebook. It's like making an Xbox 360 exclusive game if there was a $0 porting cost. If Facebook is bought out by Microsoft or Apple, it will truly be a threat as a universal login system. But until then, they will die a death from a 1000 paper cuts.
  - robryan 14y ago
    I see facebooks problem right now more as an inability to effective monetize their users, rather than at risk of a large set exodus any time soon. Facebook is very ingrained in what so many people and businesses do now unlike any other web service has been. You see Facebook branding on most businesses ads and physical locations. Of course it is possible to overcome these network effects but I think that if they are smart enough they can keep it going. Then it just becomes a question of what valuation they can sustain without being so invasive as to completely alienate their userbase. On an anecdotal level I have seen people try things like Path, Instagram, the location based networks etc. Most when the mental overhead of all the social networks get to much eventually just mainly settle back on Facebook (with Twitter being the only real exception)
    - chii 14y ago
      > an inability to effective monetize their users this is the problem - facebook's value proposition for a user is not Facebook itself, but the ability to interact with another person easily (games, photoshares, pokes etc). However, this isn't actually worth very much money, and to try to extract that from the user is fruitless. The only real way to monetize is really to sell behavioural data of its users to advertisers. There is real value in that, even if the users don't like it. But its a double edged sword, and this sword is what is going to kill facebook!
- beagle3 14y ago
  Where does the magical $10 number come from in this decision of yours?
- phaus 14y ago
  Facebook may stick around for years to come, but I disagree that it's an awesome business. Unless oriented towards professional profiles (like LinkedIn), social networks are a terrible idea. Just because everyone likes something, doesn't mean it it's in their best interest. Facebook is just a voluntary invasion of privacy. Right now most people are either using Facebook to post memes and soft core pornography that they find elsewhere, bitch about how their lives are more difficult than everyone else's because they have a job(try not having one for a while), or to stalk their current / former significant others. I myself prefer more direct and personal forms of communication like Skype, Instant Messaging(Facebook Chat is merely adequate), phone calls or email. Unfortunately, I am saddled with Facebook because everyone I know has abandoned all other forms of communication.
ThomPete 14y ago
Facebook have a problem that Google hasn't. 1. Their social graph is great but it has one major flaw. It's very bad at profiling intent. They also have a problem they share with Google. 2. They haven't found a way to make advertising work on mobile, an increasing part of their visits. Unless they find a way to solve those two areas they will not be able grow their revenue without hurting their visitors.
- r00fus 14y ago
  > 2. They haven't found a way to make advertising work on mobile, an increasing part of their visits. And herein is the problem: Apple - Apple is so against advertising that they created their own iAd network to keep other companies out of the game (it doesn't have to really be a success - just enough to keep devs off competing ad networks). As long as Apple is influential in the mobile world, Google and Facebook are going to have a tough time with mobile ads... do consumers actually want ads? Apple is betting no, and as far as they're concerned - screw the devs and advertisers.
  - ThomPete 14y ago
    Hmm Actually I think the problem is bigger than that. Android is a more popular mobile OS than iOS by far and in fact googles reason for approaching it that way is that they want a platform to serve ads on. But so far they havne't managed to find a way to do it.
    - r00fus 14y ago
      I think monetization would require near-monopoly-level control for Google. How much would adwords bring in if Google weren't the "default search" destination? If Google can basically kick Apple back into niche status (not there yet), then they could extract monopoly rents on a defacto standard of ad-based apps either using Google's mobile ad network, or a consortium of which they are the sole influential player. Perhaps that explains why they haven't tried to heavily monetize this yet - that would pus more consumers into non-ad-based apps where Apple is strongest.
  - 14y ago
dkrich 14y ago
I think this is just thiel putting his money where his mouth is. Anybody who has followed him knows it's no secret that he's spoken out against companies solving small problems and has even implied facebook to be squarely in that camp.
jamesmcn 14y ago
It is worth highlighting that this sale was via a Rule 10b5-1 trading plan. That is, Thiel made the decision to sell prior to the IPO.
- rootedbox 14y ago
  A facebook insider decided that facebook wasn't worth keeping his money in prior to the IPO. That is highlightable..
  - izak30 14y ago
    By the reports, he made 800x on his investment. He's held on for a while already.
    - rootedbox 14y ago
      Should Warren Buffet sell on his total investment? I mean he's got a return of 10000000x, and he's been in it for a really really long time..
      - jamesaguilar 14y ago
        A) he has sold a good portion of it. B) Berkshire Hathaway is a holding company. It is diversified already. So there is much less of a need to sell it.
        rootedbox 14y ago
        So you're saying Berkshire Hathaway is much better setup as a long term business than Facebook; therefore a better investment. I don't disagree at all.
        jamesaguilar 14y ago
        No, being diversified doesn't instantly make you a better business. But it does make you a safer investment.
qq66 14y ago
Would you expect him to do anything else? Invert the question: if you had $500 million cash, would you spend it all on Facebook stock? Or Google stock? Or any one stock? Even for company insiders who really believe in the future of their company, it isn't prudent to hold more than a small fraction of a billion-dollar fortune in one stock, from a purely rational perspective. Of course, the public expects irrationally enthusiastic behavior from founders, which is the only thing that leads to the gigantic fortunes amassed by the Gates/Ellisons of the world.
- cfront 14y ago
  Is this some sort of extreme cognitive dissonance? Why can't people just accept that Facebook is a fad? It does not mean the world is going to end. It's a fad, not a solid company. We went through this before 12 years ago. Eventually the market figures it out. Move on. That's what Thiel is doing. More fads are around the corner. Investors will keep falling for the same old tricks. Gates and Ellison are very poor comparisons. Their software was not web-based (=ad-based), their main market was the enterprise and they went to great lengths to create long-term customer lock-in. They began in a different era, and are nothing like Facebook, which is a photo-sharing website that relies on display ads and game-playing "whales" to make money.
  - mikeryan 14y ago
    It's fad, not a solid company. I'm pretty bearish on Facebook's stock, but there's nothing here to indicate its just a fad. This is a company with over a billion dollars in revenues per quarter with a pretty consistent 15-25% profit margin. Is it the next Google? Its looking more and more like its not, but that doesn't mean its going to be the next Yahoo! either.
    - jfb 14y ago
      Facebook would be unbelievably lucky to be the next Yahoo! -- sure, they're dead meat now, but that just means its easy to forget what a success Y! used to be.
aasarava 14y ago
Everyone keeps focusing on Facebook as an ad platform, and pointing to the difficulty in monetizing mobile via ads. But I'm betting Facebook is on the brink of rolling out a digital wallet. They already act as an authentication/identity service with hundreds of millions of users. If those users linked their FB accounts to their bank accounts, they'd be able to buy anything on any integrated website that they log into with FB Connect -- or eventually in any store that wants to handle FB payments. With FB taking a small cut of every transaction, I imagine PayPal and Stripe would be in trouble, no? Mobile doesn't have to be about ads....
- brk 14y ago
  Given their past approach to several privacy and sharing type issues, there is no way in hell I'm buying anything with a Facebook wallet.
  - ricree 14y ago
    Nor will I. But judging by the past response to privacy issues, there are a lot of people that will complain for a week before jumping headfirst.
  - tedunangst 14y ago
    Which of the following companies paid an FTC fine for sharing user data, Facebook or Google? Do you trust that company with your money? :)
    - deleted 14y ago
      [deleted]
- J-H 14y ago
  The problem here is would you trust Facebook with your wallet? I wouldn't, and I'm betting most wouldn't after all of Facebook's Privacy gaffes.
  - untog 14y ago
dj2stein9 14y ago
The Facebook story is over. They got ahead in the social network game of making communication over the Internet easier. They did this by making Email obsolete. One centralized system where all users can send instant messages to one another without remembering user logins, email addresses, or phone numbers. This is the ONLY advantage Facebook has over its competitors. And I guarantee their current advantages are going to be eroded away by more open protocols. In the same way that Twitter's current advantage in microblogging is also going to be eroded away. If you get too far ahead of everyone else you become the target, and there are simply so many startups and smart brains working against Facebook and Twitter at this point that they simply will not be able to maintain their leads indefinitely (which is what their market values are incorrectly predicting).
- csallen 14y ago
  You're focusing only on features, and ignoring the fact that Facebook has more active users on their site for more time per day and with a higher retention rate than any other site in existence, and that network effects have created an almost insurmountable barrier to entry.
  - dj2stein9 14y ago
    You know who currently has an even better advantage in social networks? Cell phone carriers. If I take a look at my Facebook friendlist or feed, and compare it to the last calls and messages made on my cellphone -- they don't match up at all. That means, at least to me, Facebook's graph for me doesn't relate at all to my real world social network, and so most of its value is probably artificial. Certainly no system ever built can match Facebook's penetration rate, but it will probably always pale in comparison the real world social network. The difference is mobile devices are going to map a lot better to the actual network in ways that Facebook will be unable to capitalize on.
001sky 14y ago
The market is concluding FB is not likely $1 trillion company. The Q is order of magnitude for FB $TEV. A. $1000B ? No... B. $100B? Maybe C. $10B? Possible I think Theil is obvi not betting on $1T. Thus, after 8 yrs, time to go. At ranges between B and C, holding a large position in a public stock that is exhibiting true volatility (ie, something other than upward drift), is not likely to please his LP investors. Nor, similarly would it be advised for his own holdings. Reading more into the tea-leaves (ie, operationally) might be fun, but I'm not sure its adding explanatory power to what we are seeing here.
dutchbrit 14y ago
Peter, if you are reading this, there's one question I'd love to ask. Why did tou even buy Facebook shares in the first place? Just to say you owned a part of Facebook? It was a clear failure from the beginning when they hit the market, way overpriced - surely you must of known this too. And then comes why other question. Why sell now, after loosing so much money? If you were willing to take a gamble in the first place, you should of been prepared to stick with it for a few years - it might go back up, but that's only if FB manage to get their shit together.
- benjaminwootton 14y ago
  Did you even skim read the article? He invested $500k as one of their earliest investors, and turned that into $400 million. He sold when he did because of a lock up period.
  - dutchbrit 14y ago
    Christ, I must of been asleep while reading that article! You're right.
- jamesaguilar 14y ago
  I wish I could take back my downvote. T_T
rdl 14y ago
Selling before the end of the year saves him over a hundred million in capital gains, too.
sytelus 14y ago
The 10b5-1 is actually bit fuzzy on whether you can cancel trading plan. SEC basically says that if you cancel the trade than you are not legally liable because no transaction actually occurred and so one cannot claim that you profited from insider trading. So in theory you can cancel the trading plan if you like. However if SEC feels that you cancelled only because of price drop then they can come after you for ALL your future trading plans or may even re-examine previous trades to see if you were trying to game the system. Therefore executives are advised by to cancel only under extraordinary circumstances. So I think Thiel had lot of legal pressure, although technically not an obligation, to sell as per his trading plan filing. He could have taken risk but it's probably not worth it for another half-a-billion of profit if you are already multi-billionaire and if you are already cultivating 1000X returns as it is. On the other hand it is surprising that he decided to sell most of his stock instead say only quarter or so. I would think Thiel as a long term investor in FB from what I've read in the book "Facebook Effect". Thiel is one of the few person that probably knows most upcoming plans and products in works and problems at FB. A typical strategy for investors like Thiel is to cash out in stages instead of dumping most stock at once like regular VCs do (10-25% each quarter, for example). Considering his level of insider knowledge this only means he did not expect FB stock going up at the time of trade filing in at least 1 to 2 year horizon. This is even more surprising because I keep thinking FB is going to come out with something like AdSense any day now and almost instantly double its revenues bringing stock back to $25-30. Obviously Thiel has calculated things differently.

108 points by nikhilpandit 14y ago

I'm going to buy when it gets closer to $10 per share. Half the world uses Facebook every day so let's not pretend it isn't an awesome business with utterly massive potential.

joelrunyon 14y ago
"awesome business" and "massive potential" aren't mutually exclusive events. It can have massive potential, but never deliver and still be a terrible business. Sure, it's got a lot of upside if you can buy it at the right price, but up till now, it hasn't shown advertisers (who make up the majority of their revenue) that it can deliver customers as acceptable CPAs. Until that happens, we'll still be waiting for facebook to be an "awesome business."
- grandalf 14y ago
  I don't think CPAs are the right metric. Facebook is massively engaging. I think TV is the most natural synergy b/c people socialize around it today but only in one household. Facebook should also launch a web search similar to Google just go capture some market share in search-driven advertising. Around the world, Facebook is the fastest loading website (it often beats Google). Its infrastructure is ready to make a truly global play of some kind. Expect something huge after the stock price stabilizes a bit.
  - bunderbunder 14y ago
    Perhaps CPA is not the right metric. But a bunch of hype that glosses over the fact that Facebook doesn't really actually make very much money is not the right metric, either.
    - chii 14y ago
      But i thought facebook's revenues are in the billions? Where is that money coming from?
      - joelrunyon 14y ago
        A little over 3.5 billion. I think he was saying that the revenue considering the company size and user base (almost 1 billion) is not very much.
        bunderbunder 14y ago
        Yup. Especially considering their revenue has also been falling, that there are concrete reasons to think that it will continue to do so, and that they're operating in a notoriously brutal and fickle space. There's money there, but not enough to cushion a fall.
  - nazgulnarsil 14y ago
    if TV is the model facebook should acquire synchtube.
    - samstave 14y ago
      Facebook should sponsor and create content viewing events that are only visable via facebook. What if there was a "real world FB" where FB users live together and drama ensues - and the only way to watch it is FB.com. There are so many other things that FB could do to truly be a platform: Education via FB, Work via FB (think having a mechanical turk via FB where users could sign up to be a part of the service and use the FB platform to earn money), videoconference within FB, etc etc etc.
  - joelrunyon 14y ago
    If CPAs aren't the right metric, you still need to find a better metric to convince advertisers it's worth it. And I think the "look how many users we have!" metric is going away quickly.
  - slantyyz 14y ago
    Facebook is massively engaging, but the ads they allow to appear on the site are incredibly off-putting. I personally don't mind ads on sites, but the Facebook ads that I'm fed all appear to be for slimy businesses (I'm constantly seeing ads for Canadian Pardons that are using what I believe to be unauthorized images of celebrities) or have seemingly low-to-no production values. They need to fix or curate the way ads are displayed, because I think it will eventually become a hindrance to their success.
batgaijin 14y ago
See, I hate arguments for this. How many new accounts did you create annually 10 years ago? How many new accounts did you create annually 5 years ago? How many new accounts did you create this year? People don't mind switching, and in fact they don't mind having simultaneous accounts. People on this forum think that they are 'special' inasmuch they don't mind negotiating multiple accounts with relative ease, but it's an inevitable tactic. Facebook can be used to login to other sites, but with Google+ and Twitter and the $20 share price, nobody small wants to bet on Facebook. It's like making an Xbox 360 exclusive game if there was a $0 porting cost. If Facebook is bought out by Microsoft or Apple, it will truly be a threat as a universal login system. But until then, they will die a death from a 1000 paper cuts.
- robryan 14y ago
  I see facebooks problem right now more as an inability to effective monetize their users, rather than at risk of a large set exodus any time soon. Facebook is very ingrained in what so many people and businesses do now unlike any other web service has been. You see Facebook branding on most businesses ads and physical locations. Of course it is possible to overcome these network effects but I think that if they are smart enough they can keep it going. Then it just becomes a question of what valuation they can sustain without being so invasive as to completely alienate their userbase. On an anecdotal level I have seen people try things like Path, Instagram, the location based networks etc. Most when the mental overhead of all the social networks get to much eventually just mainly settle back on Facebook (with Twitter being the only real exception)
  - chii 14y ago
    > an inability to effective monetize their users this is the problem - facebook's value proposition for a user is not Facebook itself, but the ability to interact with another person easily (games, photoshares, pokes etc). However, this isn't actually worth very much money, and to try to extract that from the user is fruitless. The only real way to monetize is really to sell behavioural data of its users to advertisers. There is real value in that, even if the users don't like it. But its a double edged sword, and this sword is what is going to kill facebook!
beagle3 14y ago
Where does the magical $10 number come from in this decision of yours?
phaus 14y ago
Facebook may stick around for years to come, but I disagree that it's an awesome business. Unless oriented towards professional profiles (like LinkedIn), social networks are a terrible idea. Just because everyone likes something, doesn't mean it it's in their best interest. Facebook is just a voluntary invasion of privacy. Right now most people are either using Facebook to post memes and soft core pornography that they find elsewhere, bitch about how their lives are more difficult than everyone else's because they have a job(try not having one for a while), or to stalk their current / former significant others. I myself prefer more direct and personal forms of communication like Skype, Instant Messaging(Facebook Chat is merely adequate), phone calls or email. Unfortunately, I am saddled with Facebook because everyone I know has abandoned all other forms of communication.

ThomPete 14y ago

Facebook have a problem that Google hasn't. 1. Their social graph is great but it has one major flaw. It's very bad at profiling intent. They also have a problem they share with Google. 2. They haven't found a way to make advertising work on mobile, an increasing part of their visits. Unless they find a way to solve those two areas they will not be able grow their revenue without hurting their visitors.

r00fus 14y ago
> 2. They haven't found a way to make advertising work on mobile, an increasing part of their visits. And herein is the problem: Apple - Apple is so against advertising that they created their own iAd network to keep other companies out of the game (it doesn't have to really be a success - just enough to keep devs off competing ad networks). As long as Apple is influential in the mobile world, Google and Facebook are going to have a tough time with mobile ads... do consumers actually want ads? Apple is betting no, and as far as they're concerned - screw the devs and advertisers.
- ThomPete 14y ago
  Hmm Actually I think the problem is bigger than that. Android is a more popular mobile OS than iOS by far and in fact googles reason for approaching it that way is that they want a platform to serve ads on. But so far they havne't managed to find a way to do it.
  - r00fus 14y ago
    I think monetization would require near-monopoly-level control for Google. How much would adwords bring in if Google weren't the "default search" destination? If Google can basically kick Apple back into niche status (not there yet), then they could extract monopoly rents on a defacto standard of ad-based apps either using Google's mobile ad network, or a consortium of which they are the sole influential player. Perhaps that explains why they haven't tried to heavily monetize this yet - that would pus more consumers into non-ad-based apps where Apple is strongest.
- 14y ago

dkrich 14y ago

I think this is just thiel putting his money where his mouth is. Anybody who has followed him knows it's no secret that he's spoken out against companies solving small problems and has even implied facebook to be squarely in that camp.

jamesmcn 14y ago

It is worth highlighting that this sale was via a Rule 10b5-1 trading plan. That is, Thiel made the decision to sell prior to the IPO.

rootedbox 14y ago
A facebook insider decided that facebook wasn't worth keeping his money in prior to the IPO. That is highlightable..
- izak30 14y ago
  By the reports, he made 800x on his investment. He's held on for a while already.
  - rootedbox 14y ago
    Should Warren Buffet sell on his total investment? I mean he's got a return of 10000000x, and he's been in it for a really really long time..
    - jamesaguilar 14y ago
      A) he has sold a good portion of it. B) Berkshire Hathaway is a holding company. It is diversified already. So there is much less of a need to sell it.
      - rootedbox 14y ago
        So you're saying Berkshire Hathaway is much better setup as a long term business than Facebook; therefore a better investment. I don't disagree at all.
        jamesaguilar 14y ago
        No, being diversified doesn't instantly make you a better business. But it does make you a safer investment.

qq66 14y ago

Would you expect him to do anything else? Invert the question: if you had $500 million cash, would you spend it all on Facebook stock? Or Google stock? Or any one stock? Even for company insiders who really believe in the future of their company, it isn't prudent to hold more than a small fraction of a billion-dollar fortune in one stock, from a purely rational perspective. Of course, the public expects irrationally enthusiastic behavior from founders, which is the only thing that leads to the gigantic fortunes amassed by the Gates/Ellisons of the world.

cfront 14y ago
Is this some sort of extreme cognitive dissonance? Why can't people just accept that Facebook is a fad? It does not mean the world is going to end. It's a fad, not a solid company. We went through this before 12 years ago. Eventually the market figures it out. Move on. That's what Thiel is doing. More fads are around the corner. Investors will keep falling for the same old tricks. Gates and Ellison are very poor comparisons. Their software was not web-based (=ad-based), their main market was the enterprise and they went to great lengths to create long-term customer lock-in. They began in a different era, and are nothing like Facebook, which is a photo-sharing website that relies on display ads and game-playing "whales" to make money.
- mikeryan 14y ago
  It's fad, not a solid company. I'm pretty bearish on Facebook's stock, but there's nothing here to indicate its just a fad. This is a company with over a billion dollars in revenues per quarter with a pretty consistent 15-25% profit margin. Is it the next Google? Its looking more and more like its not, but that doesn't mean its going to be the next Yahoo! either.
  - jfb 14y ago
    Facebook would be unbelievably lucky to be the next Yahoo! -- sure, they're dead meat now, but that just means its easy to forget what a success Y! used to be.

aasarava 14y ago

Everyone keeps focusing on Facebook as an ad platform, and pointing to the difficulty in monetizing mobile via ads. But I'm betting Facebook is on the brink of rolling out a digital wallet. They already act as an authentication/identity service with hundreds of millions of users. If those users linked their FB accounts to their bank accounts, they'd be able to buy anything on any integrated website that they log into with FB Connect -- or eventually in any store that wants to handle FB payments. With FB taking a small cut of every transaction, I imagine PayPal and Stripe would be in trouble, no? Mobile doesn't have to be about ads....

brk 14y ago
Given their past approach to several privacy and sharing type issues, there is no way in hell I'm buying anything with a Facebook wallet.
- ricree 14y ago
  Nor will I. But judging by the past response to privacy issues, there are a lot of people that will complain for a week before jumping headfirst.
- tedunangst 14y ago
  Which of the following companies paid an FTC fine for sharing user data, Facebook or Google? Do you trust that company with your money? :)
  - deleted 14y ago
    [deleted]
J-H 14y ago
The problem here is would you trust Facebook with your wallet? I wouldn't, and I'm betting most wouldn't after all of Facebook's Privacy gaffes.
- untog 14y ago

dj2stein9 14y ago

The Facebook story is over. They got ahead in the social network game of making communication over the Internet easier. They did this by making Email obsolete. One centralized system where all users can send instant messages to one another without remembering user logins, email addresses, or phone numbers. This is the ONLY advantage Facebook has over its competitors. And I guarantee their current advantages are going to be eroded away by more open protocols. In the same way that Twitter's current advantage in microblogging is also going to be eroded away. If you get too far ahead of everyone else you become the target, and there are simply so many startups and smart brains working against Facebook and Twitter at this point that they simply will not be able to maintain their leads indefinitely (which is what their market values are incorrectly predicting).

csallen 14y ago
You're focusing only on features, and ignoring the fact that Facebook has more active users on their site for more time per day and with a higher retention rate than any other site in existence, and that network effects have created an almost insurmountable barrier to entry.
- dj2stein9 14y ago
  You know who currently has an even better advantage in social networks? Cell phone carriers. If I take a look at my Facebook friendlist or feed, and compare it to the last calls and messages made on my cellphone -- they don't match up at all. That means, at least to me, Facebook's graph for me doesn't relate at all to my real world social network, and so most of its value is probably artificial. Certainly no system ever built can match Facebook's penetration rate, but it will probably always pale in comparison the real world social network. The difference is mobile devices are going to map a lot better to the actual network in ways that Facebook will be unable to capitalize on.

001sky 14y ago

The market is concluding FB is not likely $1 trillion company. The Q is order of magnitude for FB $TEV. A. $1000B ? No... B. $100B? Maybe C. $10B? Possible I think Theil is obvi not betting on $1T. Thus, after 8 yrs, time to go. At ranges between B and C, holding a large position in a public stock that is exhibiting true volatility (ie, something other than upward drift), is not likely to please his LP investors. Nor, similarly would it be advised for his own holdings. Reading more into the tea-leaves (ie, operationally) might be fun, but I'm not sure its adding explanatory power to what we are seeing here.

dutchbrit 14y ago

Peter, if you are reading this, there's one question I'd love to ask. Why did tou even buy Facebook shares in the first place? Just to say you owned a part of Facebook? It was a clear failure from the beginning when they hit the market, way overpriced - surely you must of known this too. And then comes why other question. Why sell now, after loosing so much money? If you were willing to take a gamble in the first place, you should of been prepared to stick with it for a few years - it might go back up, but that's only if FB manage to get their shit together.

benjaminwootton 14y ago
Did you even skim read the article? He invested $500k as one of their earliest investors, and turned that into $400 million. He sold when he did because of a lock up period.
- dutchbrit 14y ago
  Christ, I must of been asleep while reading that article! You're right.
jamesaguilar 14y ago
I wish I could take back my downvote. T_T

rdl 14y ago

Selling before the end of the year saves him over a hundred million in capital gains, too.

sytelus 14y ago

The 10b5-1 is actually bit fuzzy on whether you can cancel trading plan. SEC basically says that if you cancel the trade than you are not legally liable because no transaction actually occurred and so one cannot claim that you profited from insider trading. So in theory you can cancel the trading plan if you like. However if SEC feels that you cancelled only because of price drop then they can come after you for ALL your future trading plans or may even re-examine previous trades to see if you were trying to game the system. Therefore executives are advised by to cancel only under extraordinary circumstances. So I think Thiel had lot of legal pressure, although technically not an obligation, to sell as per his trading plan filing. He could have taken risk but it's probably not worth it for another half-a-billion of profit if you are already multi-billionaire and if you are already cultivating 1000X returns as it is. On the other hand it is surprising that he decided to sell most of his stock instead say only quarter or so. I would think Thiel as a long term investor in FB from what I've read in the book "Facebook Effect". Thiel is one of the few person that probably knows most upcoming plans and products in works and problems at FB. A typical strategy for investors like Thiel is to cash out in stages instead of dumping most stock at once like regular VCs do (10-25% each quarter, for example). Considering his level of insider knowledge this only means he did not expect FB stock going up at the time of trade filing in at least 1 to 2 year horizon. This is even more surprising because I keep thinking FB is going to come out with something like AdSense any day now and almost instantly double its revenues bringing stock back to $25-30. Obviously Thiel has calculated things differently.