“A lot of people have been waiting,” he said. “Facebook was expected to go public a long time ago.”
Despite the sharp drop in Facebook’s market value during the past three months, the early investors can still reap huge windfalls by selling at the current price.
For instance, Thiel invested $500,000 in Facebook in 2004, the year CEO Mark Zuckerberg began the site in a Harvard dorm room.
After selling 16.8 million shares for $640 million at the time of the initial public offering in May, Thiel still owned nearly 28 million shares worth about $560 million at Thursday’s trading prices.
Accel Partners invested $12.7 million in Facebook in 2005. The firm sold nearly 58 million shares for $2.2 billion as part of Facebook’s IPO and still owned nearly 144 million shares worth about $2.9 billion.
It wasn’t known how many of those shares could have been sold Thursday, and whether any of them were.
Because those investors had put up little compared with the shares’ value today, “you can understand why they would want to take some of their money off the table now,” Maher said. “But at the same time, you have to wonder if they’re thinking that Facebook isn’t much of a bargain anymore.”
Hamadeh believes the venture capitalists who invested in Facebook realize it’s a “fool’s game” to wait for a better price on the stock.
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