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Andreessen Horowitz Sells a Third of its Facebook Shares
- kayoone 13y agoTLDR Nothing to interesting, they got in relatively late and are now selling a part to give it back to investors while still keeping the majority of their shares, so this has nothing todo with them not trusting in Facebooks vision any longer.
- blisterpeanuts 13y agoBut if they still believed in FB's vision, why would they dump so much stock? 1/3 sounds like a lot to me.
- charlesdm 13y agoMaybe they need to liquidate part of their holdings to: 1/ Return some capital to investors 2/ Start up a new fund to invest in other things? They would've sold their entire stake if they didn't believe FB would grow anymore.
- AsymetricCom 13y agoWhat a ridiculous supposition. The truth is we can't read anything into this except that is a very significant percentage of his FB holdings.
- tptacek 13y agoIf they don't believe in FB's vision, why would they retain 2/3rds of their Fb holdings? What a silly comment.
- codex 13y agoBecause they believe in Facebook's vision 33% less than they used to?
- Retric 13y agoBecause dumping enough stock reduces the price so waiting a a week or more between sell offs is a good idea.
- tptacek 13y agoObviously nobody js going to remember you saying this a week from now when they don't in fact unload another block of Fb, or reconcile the comment against Fb's price next week. It's just typical message board BS, is the bet I'm willing to place.
- blisterpeanuts 13y ago> If they don't believe in FB's vision, why would they retain 2/3rds of their Fb holdings? What a silly comment. It wasn't a comment; it was a question. What's silly is to respond with a fact-free retort that provides no value whatsoever to the discussion. Although I'm no investing expert, it's my long-held understanding that investors don't hold onto stocks that they expect to go down, and investors don't sell stocks that are expected to rise. Currently Facebook is generally recommended as a "buy" or a "strong buy", and price targets are around $60. It's possible that Andreessen's motivations had nothing to do with their expectations of the stock's performance (versus other stocks that they may have set their sites on) but I tend to doubt it.
- prostoalex 13y agoTheir fund has a termination date. They don't want to be forced to sell on that date.
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- ghshephard 13y agoYou didn't bring much to the conversation other than a pithy comment about snapchat/facebook. I'm actually more interested in why people are voting up this article - it really seems to be a "nothing to see here" type of article. Big VC invests money in startup and then liquidates some after solid performance. Seems reasonable to me.
- napoleoncomplex 13y agoThe upvotes are likely from people wondering "is there something to see here?", who want to get HN's two cents on the topic, which turns out to be very boring, as you explained. Edit: Any reason for the downvote? I genuinely tried to answer ghshephard's question. I don't think it's that off-base that people want to see what the HN community thinks about this piece of news. In other news, I just discovered I'm too sensitive about downvotes :).
- coralreef 13y agoTotal value of said sale?
- pkrumins 13y agoAndreessen Horowitz owns .25% of facebook. A quick calculation shows that the sales value at yesterday's close is around $100M.
- confluence 13y agoFacebook is about 4x over fair value, so it's a pretty decent sale. It's too bad for the public investors that bought that shit up though. There should probably be a basic financial test that people should have to pass before they get access to a brokerage account. At some of the prices I'm seeing stock clearing, it's obvious that the buyers have not actually read any financial reports. Something like a basic written comprehension test on a random 10-K filing would efficiently and cheaply filter out those who are, and aren't, qualified to manage their own money. In fact, I'd wager that it'd probably reject a whole bunch of finance/eco/accounting majors as well. If you don't know your balance sheet, from your income statement, from your FCF, from your capex, then you probably don't have any business buying or selling financial assets. To anyone who says that this is an unfair statement, I have no knowledge of airplane mechanics, and hence, I probably have no business repairing airplanes. The same reasoning applies to investments.
- MarcusBrutus 13y agoBogus analogy. You have no business repairing airplanes because you may endanger lives. People should be free to squander their money in their folly if they so choose. Otherwise outlaw lottery, gambling and horse-racing as well.
- confluence 13y agoWhy not outlaw lottery, gambling and horse-racing? People misallocating capital is just as dangerous as an airplane mechanic misplacing a bolt on a Cessna. Both actions end up, in the long run, with people dying.
- rwmj 13y agoMost societies do try to control gambling because of the social problems it causes. However this has nothing much to do with misallocating capital (after all, if they're misallocating it in gambling, why do you think they'd be smart enough to do any better if not allowed to gamble?) If you truly want to try allocating that capital better than the former owners of the money, buy shares in gambling companies.
- carrotsarm 13y agoGood Timing. No data to back what I'm saying, but I don't see FB going up any further. The time spent by me (almost none) and my other non-techie friends has decreased drastically on the website and I still don't see a very effective monetization strategy.
- majani 13y agoThey still have two billion dollar opportunities that they are sitting on: 1. An Adsense competitor 2. Video ads These are not wild predictions of possible revenue streams. Facebook has already launched these features to select partners and when they are launched to the public, their stock will jump a lot more.
- sharkweek 13y agoI am waiting for a good explanation as to why they haven't started an Adsense competitor yet; seems like it would be a goldmine
- adventured 13y agoThe only explanation I've seen that makes any sense to me, is that their ad systems are still immature. They haven't figured out how to properly monetize their own platforms fully just yet, much less the rest of the Web. Which also helps to explain why they get rated so poorly on return-on-investment when it comes to ad spending. I'd say the last year has been a substantial break-through for Facebook in terms of pushing their ad systems forward and getting wide adoption of it (including finally getting mobile to spit dollars). Maybe a couple more years of developing their advertising platform and they'll get there. I also think there's a general underestimation of how good the Google ad system is overall, and how hard it is to compete with.
- majani 13y agoFacebook's game is to show that they can act on the grand old online media promise: that they first get loads of users, then later they can turn on the revenue streams and the cash comes pouring in. Facebook is living up to this promise with the way they turned on mobile ads and they are now bringing in over a billion dollars annually. I think they want to maximize on that opportunity first, then turn on another revenue stream after mobile ad growth starts to slow. If they pull this off, they will be Wall Street darlings
- pearjuice 13y ago"A pyramid scheme is an unsustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment" "By selling some of its holdings, she said the firm is able to return cash to its investors." welp
- nkohari 13y agoThe amount that you misunderstand what you're talking about is staggering.
- loceng 13y agoThe point is they're not that confident the stock will go up much more. Sure, you could look at it as spreading risk.
- acjohnson55 13y agoIf that were true, they would liquidate much more aggressively. I don't know how much total value in shares they have left, but if you're a venture investor, your goal isn't to tie up all your money in ventures that have already broken through; your goal is to find the next one. If all they wanted to do is go long on stocks, they could do that without all the venture investing.
- loceng 13y agoIf they started to liquidate quickly, so would everyone else - and they'd piss off their co-investors too if they didn't do it fully planned out. Regarding going long on investments in a different way - that won't bring them the same return.
- jf22 13y agoBy selling holdings and not returning cash from new members this scenario is clearly not a pyramid scheme. The quote from the article makes a comparison to a pyramid scheme impossible. Are you trolling?
- eriksank 13y agoSince they know who you are, and since the central banking database knows how much money you have in what bank accounts, and since they know who your friends are, it is no problem to demographically calculate that you could reasonably get a heart attack now. Of course, you made quite a few strange large purchases just before you died, but only your friends would know that these were strange. Your balance is pretty much gone. You seem to be no longer keeping them up to date on what you are doing? Facebook is simply a gold mine, because any money that you are holding in bank accounts forms collectively a bounty on your head.
- jhonovich 13y agoThere's no value to A16Z's investors for A16Z to hold shares in publicly traded companies. If the investors want to, they can buy shares directly and not through a VC firm. The value to these investors is access and expertise in selecting private companies, not holding shares in public ones.
- rhaker 13y agopoint well made, though, there may be U.S. tax reasons that would influence the timing of sales (e.g. offsets in their portfolio)