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

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

#21

Post by cfront »

qq66 wrote: post #18

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…

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.

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

#22

Post by robryan »

batgaijin wrote: post #19
grandalf wrote: post #2

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.

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…

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)

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

#23

Post by mikeryan »

cfront wrote: post #21
qq66 wrote: post #18

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…

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 comp…

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.

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

#24

Post by qq66 »

cfront wrote: post #21
qq66 wrote: post #18

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…

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 comp…

Not sure how I can explain it any further than I already did, but diversification is smart regardless of what company you've founded.

Even if you've created a company which cures cancer, educates the world's children, and solves global poverty at a 40% profit margin, once you have 100% of your multi-billion dollar fortune tied up in it, it's time to diversify.

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

#25

Post by aasarava »

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....

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

#26

Post by brk »

aasarava wrote: post #25

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…

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.

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

#27

Post by J-H »

aasarava wrote: post #25

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…

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.

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

#28

Post by [deleted] »

aasarava wrote: post #25

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…

[deleted]

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

#29

Post by izak30 »

rootedbox wrote: post #15
jamesmcn wrote: post #13

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.

A facebook insider decided that facebook wasn't worth keeping his money in prior to the IPO. That is highlightable..

By the reports, he made 800x on his investment. He's held on for a while already.

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

#30

Post by prostoalex »

rootedbox wrote: post #15
jamesmcn wrote: post #13

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.

A facebook insider decided that facebook wasn't worth keeping his money in prior to the IPO. That is highlightable..

He converted a $500,000 investment into more than $1,000,000,000, which is at least 200,000% ROI. Would you recommend against diversification at this point? Do you provide financial advisory services by any chance?
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