- An “intense year” lies ahead for Facebook as the U.S. general election looms.
- Early investor Peter Thiel recently dumped over 80% of his stake in the company.
- The early investor’s remaining stake is now worth less than $3 million.
At the time of Facebook’s (NASDAQ:FB) IPO in 2012 early investor Peter Thiel owned 2.5% of the social media giant. Now he holds just 0.000004% of the company’s outstanding stock. This is after selling 53,602 FB shares last week, leaving him with a tiny stake of 9,948 shares.
Based on Facebook’s closing price on Monday, Thiel’s remaining stake is worth a little over $2 million. At the time of Facebook’s IPO, Thiel held 44.7 million shares of the company. The stake would be worth nearly $10 billion if he hadn’t disposed of it over the years.
What’s driving Thiel to dump Facebook shares?
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Interestingly, Thiel’s move is coinciding with his former colleague at PayPal Elon Musk labelling Facebook “lame” while promoting the #DeleteFacebook campaign.
Facebook currently has bigger problems than Elon Musk’s tweets.
The 2020 U.S. general election presents a challenge to Facebook’s profits and growth. Last month, the social media giant reported that expenses had increased 51% year-on-year in 2019. This was primarily related to investments made in improving privacy and security on the platform. CEO Mark Zuckerberg has said that 2020 is going to be an “intense year.”
Let the users decide
Already, controversy is brewing over Facebook’s political ad policies. Unlike other social media platforms, which have either decided to stop political ads altogether or fact-check, Facebook has stated it will do neither. Instead, Zuckerberg has said that users should “make their own judgments.” Zuckerberg says he doesn’t believe “a private company should be censoring politicians or news.”
The controversial move has propelled more prominent figures to join the #DeleteFacebook movement. Famous personalities who have quit the social media platform in the recent past include horror writer Stephen King, comedian Sacha Baron Cohen and Apple co-founder Steve Wozniak.
Co-founder of Facebook-owned WhatsApp Brian Acton has also urged users to quit the platform.
Thiel’s response to anti-Facebook campaign? #DeleteFacebookStock
Ironically, it is Thiel who reportedly advised Mark Zuckerberg to maintain the controversial ad policy. Thiel, who holds conservative views, is one of the most prominent supporters of Donald Trump in Silicon Valley. In 2019 Trump was the biggest political ad spender on Facebook among the 2020 presidential candidates, according to The Guardian.
The outcome of the U.S. presidential election could also throw a wrench in the works for the tech giant. The current Republican administration has increased regulatory scrutiny but it could especially get worse for Facebook if a Democrat were to win the presidency.
Democratic presidential candidates such as Elizabeth Warren and Bernie Sanders, who is currently leading nationally for the party’s nomination race, have proposed breaking up Big Tech.
By reducing his interest in Facebook to a relatively minuscule stake, Peter Thiel is simply doing the smart thing. In the 2020 election cycle, it could get worse before it gets better for the social media platform.
Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.
Last modified: September 23, 2020 1:34 PM