
Peter Thiel sells most of remaining Facebook stake - Stjerrild
https://www.reuters.com/article/us-facebook-stake/peter-thiel-sells-most-of-remaining-facebook-stake-idUSKBN1DM2BQ
======
hristov
By the way, Peter Thiel already sold the majority of his FB shares around the
time of the IPO. See:

[https://www.hollywoodreporter.com/news/peter-thiel-
facebook-...](https://www.hollywoodreporter.com/news/peter-thiel-facebook-
stock-sale-billion-dollars-364152)

Notice that at the time the article was written he had sold about 37 million
shares and had only 5.6 million left. The prices he got were absolute peanuts
compared to the current price -- he sold 17 mln shares for $38, and another 20
million for about $20. The current price is $180.

I am not writing this to criticize Peter Thiel, obviously the stock market is
very difficult to predict. And, unfortunately, I did not buy FB at $20, so I
cannot say I had a better mastery of the market than him. The point I want to
make is that is downright silly to make any conclusions about FBs valuation
based on this sale.

~~~
gkoberger
Only on Hacker News would we consider making over a billion dollars "absolute
peanuts," and criticize Thiel for not being enough of a visionary to wait.

When you're Thiel, having the money liquid is more valuable than waiting. One
way to look at is that he could have 5x'd the money had he not touched it. But
I'd bet whatever he did with the money since the 2012 IPO (starting companies,
investing in companies, etc) had a much better return than 5x.

~~~
hristov
Only on Hacker News I can write an entire paragraph explaining how I am not
criticizing Thiel and then still get slammed for criticizing him.

~~~
api
There's a lot of really weird vicarious worship of the wealthy around here.
It's ironic that it's called Hacker News since traditionally hackers came from
more of a "fight the man" zeitgeist. At times it borders on sycophancy, like
when every single utterance of a VC no matter how banal is analyzed as if it's
the words of some venerated guru.

The extreme of this would be the Silicon Valley right and its full and
explicit embrace of feudalism and monarchy.

... and no, I'm not criticizing Thiel. The vicarious sycophancy of the HN
community is a lot weirder and at times more troubling than the behavior of
the actual SV rich.

~~~
fullshark
That’s cause we are all temporarily embarrassed billionaires.

------
vm
This is non-news. The sale was "part of a previously established trading plan"
\-- VCs set these up all the time to slowly sell off shares in a way that's
not disruptive to companies. If you owned 10% of a company and sold all that
stock in one swoop, you would crater the stock price and piss off employees.
Thiel had already sold over a $1B worth of shares by 2016 and FB stock is up
60%+ this year.

~~~
jonknee
The first sentence of the story notes that fact, but it is still news since
Thiel is a board member. Regardless of when the plan was initiated, it's
interesting that Thiel owns so little of FB.

~~~
gscott
As a board member he is going to granted a lot of free FB stock in the future.
A good problem to have.

------
felipemnoa
Holy Cow! That is Insane. Facebook's market cap is half a trillion. As
somebody that knows nothing I cannot believe that it is that high. It is on
par with Amazon. Anybody thinks we really are in a bubble?

Relevant Market Caps:

Facebook: 525.34B, PE Ratio: 33.61

Alphabet: 727.00B, PE Ratio: 35.12

Amazon: 558.65B, PE Ratio: 292.63

Apple: 895.91B, PE Ratio: 18.99

Tesla: 52.64B

Ford: 48.08B, PE Ratio: 10.98

IBM: 140.35B, PE Ratio: 12.65

Microsoft: 641.20B, P/E Ratio: 28.12

~~~
kevstev
FB and GOOG have been hoovering up practically all growth in the digital ad
space. Those PE ratios are high, but they have been blowing out their earnings
quarter after quarter.

FB has 2.07 billion monthly active users, about 1/3 of the world population,
with significant user engagement. Their userbase is on par with major world
religions and continents.

Google is the same, though their engagement is a lot more fleeting.

Amazon is hoovering up almost all of the retail growth in e-commerce, and is
now extending beyond e-commerce. They to an absurd extent, try to match their
R&D and capital investment to their revenue and almost operate as a non-
profit, so their P/E ratio always looks absurd, but their book value has
increased tremendously over the years.

This isn't 1999 where like Tesla, there was no P/E ratio because there were no
earnings (profits), and in the life of the company there had never been a
single dollar of profit made, and companies were often rated at 50x their
revenue numbers!

These are companies that have shown sustained revenue and profit growth. You
can call them overvalued, but this is not in my opinion a bubble, and I think
its important you understand the difference between now, 1999, and 2007 or you
won't recognize the next one when it comes. In 1999 there was an absolute
mania over .com stocks. In 2007 we had a credit bubble that was clear in many
statistics and being shouted from the rooftops by some that was impossible to
sustain and accompanied by speculators flipping houses, phrases like "buy now
or be priced out forever," and other nonsense.

Today, while there are some high P/E ratios, they are at least backed up by
long periods of sustained growth rates. Of course it can't last forever, and
one can only hope that they will gently reduce their growth rates and have a
soft landing rather than a hard crash.

~~~
gmjosack
This is nit-picky but the world population is 7.5 billion these days so it's
closer to 1/4 (27.6%) the world population than 1/3.

~~~
kevstev
That's actually a good thing for their long term outlook- a higher ceiling on
their potential growth.

~~~
MarkMc
True, although the number of active users is only a small component of
Facebook's enormous growth.

In past 4 years Facebook have grown their user base by 80%, mostly in lower-
income countries. But over the same period revenue has grown 400% and pretax
profit 600%.

So Facebook will likely have significant growth long after their user base
levels off.

------
sova
Facebook has been slow to realize that ads that they show are effectively
messages from Facebook. Which is why they are culpable in so much gunk, they
don't screen ads well enough and they let absolute nonsense rule the feeds.
It's really a poor case of selling out to attractive bids. Now that they
started camouflaging ads as regular posts from your friends, it's even worse.
Now they exert influence and pretend they don't.

~~~
vanattab
I am not a facebook user, how do they camouflage ads as posts from friends?

~~~
seattle_spring
They don't. Every ad is clearly marked as "Sponsored post," and it definitely
never shows up as being posted from one of your friends.

~~~
wlesieutre
But they do slip ads into your newsfeed with a "Bob likes Soylent" header at
the top. It's deliberately similar to how they display "Bob shared Soylent's
post" or "Bob commented on this."

Bob liked Soylent a year ago and has had no recent interaction with it that
would merit showing up in the newsfeed. That particular one is funny because
Bob swore off Soylent after a few months and just didn't bother to unlike
their page.

~~~
ensignavenger
That could actually be a negative for the advertiser, and positive for
consumers.. hey Bob, I noticed on Facebook that you "liked" soylent- I am
thinking abut trying it too! Do you have any thoughts? Bob: Umm, don't,
Soylent is terrible! Thanks for letting me know, I will unlike them!"

Of course, not everyone will actually ask Bob for his opinion, but if I really
cared about the fact that Bob liked something, and that was a factor in my
purchasing decision, I would probably ask him about it, myself.

~~~
wlesieutre
In that case I don't mind it anyway because I like food and I'm not interested
in their product. Makes the ads are easy for me to mentally skip over.

As a whole, it really dilutes the news feed because half of it is actual
"news" from friends (when they _recently_ posted, liked, or shared something)
and half is advertisements disguised as posts with my friends' endorsements
written at the top because they liked NYT or KFC's page five years ago.

------
osrec
Peter is a smart guy, and this does suggest Facebook is not worth holding long
term. Sean Parker's comments a few days ago were not positive either.
Anecdata-wise, things are not looking too rosy; many of my more intellectual
and interesting friends have abandoned the platform, barring the occasional
message (e.g. if they lost their phone and had to change numbers) - the less
interesting people I know (not friends, but acquaintances) seem to be fully
immersed in Facebook still. Not sure Facebook can even hold the attention of
those people much longer, as the platform is simply feels noisy, boring and
out of date!

~~~
utopcell
Which platform did your more interesting friends move to ?

~~~
osrec
They did not move to any platform. You ask the question as if being associated
with a platform is a basic necessity!

~~~
kinkrtyavimoodh
Well, unless they are purely communicating in person or by phone, SMS, or
email (or snail mail) they ARE on some platform.

~~~
osrec
Yes, if you're being pedantic about it, but they did not go from one Facebook-
like platform to another. I think people just don't see much value in
Facebook-esque platforms like before, because they recognise them as places
filled with all sorts of irrelevant junk that can usurp copious amounts of
valuable time.

~~~
kinkrtyavimoodh
That's true but to an extent that a social networking platform derives most of
its utility from having people present on it, it being a non-FB-like platform
may only be a matter of time. It could become more FB-like (if that was deemed
necessary) or it could be bought by FB or FB-like companies.

------
post_break
Has anyone else noticed the shift in their use of Facebook? I'm starting to
use it more and more for selling and buying things hyper local than
craigslist. I've had so much better luck selling people who don't show up and
try to haggle you down further with facebook than craigslist. It's become my
one stop shop to offload junk I don't need, vs use it as a social network.

~~~
anindha
I don’t like the idea of my Facebook friends knowing what I’m selling.

~~~
seattle_spring
Is selling a cabinet or a pair of skiing gloves a pretty major privacy
violation for you?

~~~
JangoSteve
"Oh, you're selling an old kitchen cabinet? Sounds like you're doing pretty
well to be able to afford a kitchen remodel. Must be nice."

"Wait, you don't have time to come to my kid's birthday party, but you're out
skiing so much that you had to upgrade your skiing gloves?"

I'm not saying it's right or makes sense, but there are a lot of contextual
layers and subtle subtext inherent in other people's relationships that may
not affect your own.

------
2close4comfort
Or when forced to pay for access to Facebook that is not rate limited people
may not use Facebook as much....

~~~
agumonkey
I'm still betting amazon and fb will start making their own pipes

~~~
toomuchtodo
How will they succeed where Google couldn't?

[https://gizmodo.com/what-happened-to-google-
fiber-1792440779](https://gizmodo.com/what-happened-to-google-
fiber-1792440779)

[http://www.sacbee.com/news/nation-
world/national/article1106...](http://www.sacbee.com/news/nation-
world/national/article110655177.html)

[https://arstechnica.com/information-
technology/2016/10/googl...](https://arstechnica.com/information-
technology/2016/10/google-fiber-laying-off-9-of-staff-will-pause-plans-
for-10-cities/)

[https://www.theguardian.com/technology/2016/oct/26/google-
fi...](https://www.theguardian.com/technology/2016/oct/26/google-fiber-
internet-stops-alphabet-layoffs)

~~~
lallysingh
The stakes are going to be higher, so perhaps they're willing to put up the $$
(in shameless bribes to local councilmembers, etc.) to do it.

~~~
2close4comfort
They were just waiting until they needed it. They didn't fail they were just
playing a different game. Now there is money to be made in sniffing all that
additional traffic. Plus the last administration was on their side and that
seems to have changed.

------
sf0i
Peter Thiel was a terrible hedge fund manager who lost his clients money. I
would not read too much into his stock market investing tactics.

~~~
bob_theslob646
Was he ?

------
techman9
I have a feeling that something scandalous is going to drop about Peter Thiel
in the near future. This news comes on the heels of YC cutting ties with him
[0].

[0] [https://www.engadget.com/2017/11/19/y-combinator-severs-
ties...](https://www.engadget.com/2017/11/19/y-combinator-severs-ties-with-
peter-thiel/)

~~~
jacksmith21006
Like giving some Senate candidate in Missouri a bunch of money to go after
Google?

~~~
kobeya
Was that actually illegal? If it was an above-the-board campaign contribution,
I'm not sure what the issue is.

------
gamechangr
I don't think this has to do with politics (or Presidential Candidates). It's
too big of a business decision.

I don't know enough, but I am curious if someone who has spent the time and
effort researching this...Is Facebook's future limited? Is there a new
challenger?

Thiel continues to swim against the current and win. Is the writing on the
wall?

------
MarkMc
I recently bought Facebook shares at $1.79 each, so my view is the polar
opposite of Peter Thiel. Here's my estimate of what will happen to the
components of Facebook revenue over next 10 years:

1\. Number of Facebook users * average user income grows 50% (keep in mind
that new Facebook users are mostly in developing countries)

2\. Amount of time on internet spent by average user grows 100%

3\. Number of ads served to an average user per hour of internet time grows
30%

4\. Effectiveness of an average Facebook ad grows 160% (ie. 10% per year)

Now 1.5 * 2 * 1.3 * 2.6 = 10.14, so I'm guessing Facebook's _revenue_ will
grow tenfold in a decade. Their _profit_ will likely grow even faster because
expenses will grow more slowly than revenue.

~~~
chroem-
What are these estimates based on? They seem to be the exact opposite of all
the major trends that are beginning to affect Facebook.

~~~
MarkMc
Just an educated guess, plus personal experience.

For example, consider how much "Number of Facebook users * average user
income" will grow over the next 10 years. Over the past 40 years world GDP per
capita has risen about 4.5% per year [1]. A portion of this growth was due to
China's economic boom so outside of China we might expect GDP per capita to
grow a little less over the next decade - let's say 3.5% per year ie. 41% in
total. But world population is growing and Facebook's penetration is growing
on top of that (albeit mostly into poorer countries) so it's reasonable to
push that estimate from 41% to 50% or 60%.

Regarding "Effectiveness of an average Facebook ad" here's my experience: In
April 2017, Apple released a new Macbook Pro. It looked great - fast, sleek,
beautiful. So I visited the Apple website, clicked 'Buy Now' and chose my
configuration options. But when I got to the credit card payment screen I had
second thoughts - it's very expensive and my old computer was still working
fine. Plus I wasn't really sure if I wanted the one with the Touch Bar or
regular keys. So I decided to think about it a bit more. And for the next 6
months I was undecided - occasionally going back to Apple's website to drool
over the specs - until I finally bought it a few weeks ago. _Within those 6
months I didn 't see a single Facebook ad for a Macbook._ So there is still
some low hanging fruit for Facebook to pluck.

[1]
[https://data.worldbank.org/indicator/NY.GDP.PCAP.CD](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD)

------
mtgx
Could this be the begining of the end for Facebook? Is 2017 for Facebook what
2009 was for BlackBerry and Nokia (when they were still getting _record_
profits and revenues - they were already toast, they just didn't know it yet)?

[https://www.emarketer.com/content/snapchat-snags-second-
plac...](https://www.emarketer.com/content/snapchat-snags-second-place-in-
social-media-stickiness)

The significant drop in engagement may also be why Facebook is dumping the
media sites from the news (ha!) feed like a hot potato. Although that was a
very Facebook thing to do, it still seemed a little desperate and like it was
happening sooner than expected.

~~~
slouch
What is a better source of local events than facebook?

~~~
stevenwoo
Nextdoor is much better for me, but most of my Facebook friends live farther
than 15 miles from me.

~~~
tedmiston
Where I live, Nextdoor is pretty much just old people complaining about
things.

~~~
sjg007
My town's Facebook group is the same way.

------
rblion
Why do you think he did that?

------
cuckcuckspruce
Good time to get as much out as possible before the FCC allows ISPs to start
shaking down Facebook.

~~~
sulam
Net neutrality is likely to help Facebook more than it hurts them, because
they can pay for access, which startups probably cannot. All the social
companies FB bought (plus the one they couldn't, SnapChat), would have had a
much harder time of it if they needed to pay a per-subscriber fee.

~~~
cuckcuckspruce
This assumes that Facebook could afford to pay that cost, as ISPs know that
Facebook is highly valuated, and that Facebook is willing to pay that cost,
knowing that an ISP without access to Facebook is currently useless to the
majority of their users.

~~~
sulam
You think people will use an ISP that Facebook says is forcing slower
connections on people? I think you’re underestimating their market power.

~~~
MatthewMcDonald
You think people have a choice? There are many areas where consumers have to
choose between one crappy ISP and other even crappier options (like
satellite).

~~~
sulam
I think the vast majority does have a choice. I know about the places you are
describing and they all have one common feature — not many people live there.

