Facebook's Zuckerberg, Thiel sell shares

[Roland99]

Source: MarketWatch

Facebook Inc. FB +3.32% Chief Executive Mark Zuckerberg has sold 30.2 million shares and director Peter Thiel has sold 16.8 million shares of the social-networking company, according to securities filings published late Tuesday. The sales confirm plans detailed in a prospectus before Friday's $16 billion IPO. Zuckerberg sold 30.2 million shares at a price of $37.58 for gross proceeds of $1.13 billion; Thiel sold 16.8 million shares for gross proceeds of $633 million. Facebook insiders had told prospective shareholders of their plans in an S-1 filing last week. Facebook FB +3.32% shares were down 0.8% after hours at $30.74.

Read more: http://www.marketwatch.com/story/facebooks-zuckerberg-thiel-sell-shares-2012-05-22?link=MW_story_popular

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Getting out while the getting's possible?

[BeyondGeography]

1. I read that as "Zuckerberg, Thief sell shares"

[Atman]

2. Same difference.

[rocktivity]

3. DUzy candidate!

rocktivity

[still_one]

5. and if you started a company that went IPO, you wouldn't sell some of your shares either? There is

nothing wrong with Zuckerberg selling his shares. He isn't a "theif" as you are equating. You can argue that the banks and brokerage houses that pushed the valuation of the IPO are, while telling their clients to get out.

In addition, Zuckerberg is not leaving the country like his counter part did, and he is paying taxes on that sale which will help California that does need that revenue.

[BeyondGeography]

11. Read the headline again

[we can do it]

12. He is a thief, the whole facecrook racquet is a scam

[frylock]

20. please explain

[4th law of robotics]

37. It certainly isn't worth what people paid for it, but they did so willingly

and without any sort of manipulation.

[Atman]

17. Okay, kids...reality check...

I started a dot.com in 1999. A few months later, I was on a plane to LA from MA to do a sales pitch when I literally -- literally -- watched the stock market crash before my eyes, on the pre-historic telephone screen on the seat-back in front of me. Dropping like stones, as I watched, and nothing I could do about it.

We still did our pitch in LA, and raised a lot of money, despite the market crash.

The company is still in business.

But here is the larger point...we raised half a million dollars. But the venture capitalists and lawyers and what-not valued the company at $4,000,000. Seriously. I was a millionaire for a year, and was looking at an apartment in Manhattan. But now...meh, not so much. I still own a few hundred thousand shares of stock in a company I'm no longer involved with, and which has never made a dime, but WTF?

Zuckerberg got suckerberged by his lawyers and Wall Street scam artists. Just like I did. I'm no Zuckerberg, but the scenario isn't much different...a hot property, traded by scam artists who didn't give a shit about the actual company, based upon a totally ridiculous pie-in-the-sky valuation.

It's a casino. Bet it on red, bet in black. Due diligence means nothing. When you're the target that shit means nothing. They'll make their money either way.

.

[still_one]

19. I think that is pretty much what I said, it was wall street and the underwriters. However,

I do believe that FaceBook will be successful

[Odin2005]

39. You are right, it is a casino. And the house always wins.

Zuckerberg got suckerberged by his lawyers and Wall Street scam artists. Just like I did.

I agree completely.

[Atman]

43. Here is what I meant by that, and why it relates...

...to Zuckerberg. Sure, there is a vast difference in scale; a $4mil company as opposed to a $104bil company. But the same bullshit applies. My company had virtually no assets. We performed a miracle, according the Wall Street people, by raising half a million bucks in "angel funding" in six months in a podunk Western New England town. The lawyers and brokers at certain big Wall Street firms who shall go unnamed until my own lawyer clears this, said we were "going places."

We used our first check to rent a big booth at Art Expo in NYC, right next to Sotheby's and a couple of other big players. We bought the entire back cover of the Art Expo program, something like 50,000 copies, for cheap. Wicked cheap...because we were supposedly so hot. The first morning of the show, four guys in $5,000 suits walked up to our booth and said they wanted in. They bought in, they valued the company at $4,000,000, they used that to raise more money, they fired me from my own company, they all made fortunes, and I walked away with some worthless paper and some valuable lessons. I was about Zuckerberg's age at the time.

My point is/was -- these Wall Street fuckers, just like Mittens, they DON'T CARE. When I was fired from my own company, a la Steve Jobs at Apple, they couldn't understand why I was upset. "It's only business," they told me. If you can't afford to play, don't get into the game. They ALL made fortunes, and every single principal in the company is now working on something else, with barely a dime to show for our efforts.

The lesson is simple...the people with money, like Mittens and the people who fucked me, don't care and will NOT -- WILL NOT -- help make you rich. There is no "level playing field" in America. If you're rich, you work to stay rich. If you're not rich, the rich will fuck you out of every good idea you ever come up with.

I hope Zuckerberg at least bought some tangible assets he can sell off after his board of directors fucks him over for a profit.

Kid, don't ever, EVER, let anyone tell you can make it America. The people that already made it will make sure you can't...they're covering their own asses. If you want to "make it," become a cut throat slimy soulless asshole like they are. Like Mitt Romney is. Then at least you'll have a shot.

[zeemike]

24. Sure it is the bag man's fault

Don't look at where the money goes.

[JDPriestly]

44. Does Zuckerberg still have a large majority share margin?

[Odin2005]

36. I did, too!

[bupkus]

46. I read it as "Suckerberg, Thief sell shares" nt

[rocktivity]

49. Another one DUzy Candidate!

rockitivity

[rocktivity]

63. DUZY ACCOMPLISHED!!!

http://www.democraticunderground.com/1002728829


rocktivity

[bupkus]

65. My first DUZY!

And until just now I didn't even know what a DUZY is.

[rocktivity]

61. DUZY ACCOMPLISHED!!!

http://www.democraticunderground.com/1002728829


rocktivity

[BeyondGeography]

64. Noted

[rocktivity]

62. DUZY ACCOMPLISHED!!!

http://www.democraticunderground.com/1002728829


rocktivity

[CBGLuthier]

4. Doing EXACTLY What They Told EVERYONE They were going to do

The devious bastards.

[KurtNYC]

6. Pump and dump

[still_one]

7. zuckerberg did not pump it. Morgan stanley and the underwriters did, along with the wall street in

in general.

[KurtNYC]

15. so what did Zuckerberg say the shares were worth?

Didn't he do a road show and ring the NASDAQ bell and now get sued for pumping?

[still_one]

21. He is doing what every CEO is told to do by the underwriters when you go public. He didn't set the

price, they did. He didn't push the stock to unrealistic values, the underwriters did

However, the main point is after what the bankers and wall street did to this country, people still fell into the trap and got suckered by them

but, even with all the deregulation that has occurred, they screwed up this time, since before the IPO morgan stanley was downgrading the company while pushing the ipo price up, and I believe that is not legal, so there should be heads to roll, but I am extremely cynical based on the way thing have gone that anything will happen

[KurtNYC]

26. Zuck said the shares would go to $44 within 6 months but he dumped at $37.66

And he is being sued. Facebook set the price and Zuck is CEO.

It wasn't Zuck that was duped. It was retail investors who believed crap like what is in this article from last Friday:

"Analysts were divided on how high the price might go on the first day of trade, with some expecting a relatively modest gain of 10 per cent to 20 per cent while others said anything short of a 50 per cent jump would be disappointing."

http://articles.economictimes.indiatimes.com/2012-05-18/news/31765580_1_mark-zuckerberg-facebook-shares-facebook-s-ipo

Zuck up'd the price and offered more shares likely because they knew it would fall out after Friday. Like gym memberships that seeks to get a big payment up front because they know that few will stick around and pay monthly. They up their lump. They pumped and they dumped.

[former9thward]

30. He didn't dump anything.

He sold 5% of his shares to pay taxes. You are saying 5% is dumping? Get real.

[KurtNYC]

31. Can you imagine how low the price would be now if he sold 20% of his shares?

He certainly wasn't betting on the price going UP.

Now that he is sued, Zuck can tell it to the judge:

http://news.cnet.com/8301-1023_3-57439918-93/facebook-zuckerberg-sued-over-ipo/

excerpt:

"The lawsuit, filed in the U.S. District Court in Manhattan this morning, charges the defendants with failing to disclose in the critical days leading up to Friday's initial public offering "a severe and pronounced reduction" in forecasts for Facebook's revenue growth, as users more and more access Facebook through mobile devices, according to Reuters, which cited a law firm for the plaintiffs. "

[former9thward]

33. He sold to pay taxes. It doesn't matter what he thought the price was going to be.

Why would he sell 20% when he now controls 57% of the voting power? He wants to keep control. Where is you link that he said it would be at 44 in six months? People sue all the time and most of these shareholder suits go nowhere. If you know the history of FB you would know that Zuckerberg never wanted to go public. When FB passed 500 private shareholders SEC regulations kicked in and FB went public.

[KurtNYC]

41. To pay taxes on the sale of the shares he sold

If he didn't sell he wouldn't owe. Steve Jobs never sold a share of Apple. Larry Ellison borrowed against his unsold stock and did not owe taxes on the market value of his stock...

You don't owe taxes until you sell -- so you can't be selling "to pay taxes" because the selling is what creates taxable income.

http://www.nytimes.com/2012/02/08/opinion/the-zuckerberg-tax.html

[former9thward]

42. Do you think he has no income other than those shares?

Has he been living on food stamps or something? I notice you did not link to where you said he said the shares would be at 44 in six months.

[Civilization2]

45. you are a sad fanboy,.

a billion banked and you don't see the dumP? ? ?

[former9thward]

48. You know nothing about business.

That is probably the source of your hate. He sold 5% of his holdings and you call that a dump. What is he supposed to do , never sell a share for the rest of his life? Do you apply that standard to all investors?

[we can do it]

58. +1

[closeupready]

8. yup.

nt

[bemildred]

23. +1.

The point of the whole deal: the "liquidity event" in which one gets to walk away with a big pile of cash. Now they get to fight to hang onto it.

[Iliyah]

9. Vulture Capitalism anyone?

Avoiding taxes, anyone???

[tularetom]

10. Nothing wrong with that, I'd do the same thing

He's entitled to get paid for the pie he baked and how else was it supposed to happen?

[we can do it]

13. You mean the pie he stole from other students

i hope the rotten bastard loses all of it

[dipsydoodle]

22. Exactly which other students ?

Be specific.

[Odin2005]

40. You mean the Winklevi?

Screw those bastards, not Zuck.

[yellowcanine]

14. Sometimes it pays to be a procrastinator. I was going to buy FB shares but just didn't get

around to it.

[onehandle]

16. Facebook, like Google, is just an ad spamming pyramid scheme.

Based on nothing.

They are unsustainable.

[Roland99]

25. esp. if everyone used Firefox with AdBlock Plus plugin

I *love* ad-free browsing!!

[octothorpe]

27. Blaaah... I created (designed, programmed, ran, hosted) a social networking site

just for shits and giggles a couple years ago. Anyway, somehow it got a good number of members and I found myself forking out a decent amount of cash (in addition to the time/effort) to keep the site running. I relied on ads to offset the cost of providing the service to people. It really bothered me when I saw people discussing ways to hide ads on my site. It's one of the reasons why I don't block ads on sites I use (such as DU), unless I'm paying for some sort of membership.

[Roland99]

38. I will never click-thru on an ad. Esp. the ones with motion.

and I donate regularly to DU so I have no qualms with using AdBlock Plus when I read up here.

But, it goes to show that the ad revenue model is not perfect for all types of media. Look at how many ads are not viewed thanks to DVRs nowadays.

[Bryn]

34. I use Chrome Google

that has AdBlock as well

[KurtNYC]

28. Google is VERY different from FB

Google kicked Goldman Sachs out of their IPO. They turned down a buyout offer from Microsoft. They CUT the size of the offering and the price before the IPO. Google opened at $85 a share is now selling at $599.

Too many other differences to list but Facebook peaked a year ago and then scrambled to cash in before the bottom drops out.

http://en.wikipedia.org/wiki/History_of_Google#Financing_and_initial_public_offering

[fujiyama]

51. Facebook has like a tenth of the ad click rate that Google has

Google is also investing heavily in a number of different areas and is a pretty innovative company overall. Is it worth $600 a share? I have no idea, but considering where they started, at $85 a piece, I'd say it's an impressive climb. Google isn't just some flash bang dot com though. They'll be around.

So will Facebook for that matter, and FB does make money, but it never should have been valuated as being $100 billion company. That was a complete joke.

[iandhr]

18. 1.13 billion is barely a drop in the bucket in terms of what he owns in the company.

Last edited Wed May 23, 2012, 12:29 PM - Edit history (1)

There is nothing wrong with this action.

[Fuddnik]

29. Oooh! Barley in a bucket!

We can make soup....and beer!

[Fearless]

32. To be fair... this is generally common...

The google CEO's did the same thing... granted not right after the IPO. It helps them shore up their own financial futures by diversifying their stock portfolio.

[polichick]

35. That's how IPOs go - big investors who get in early do well...

...small investors end up being pawns. Name of the game!

[wordpix]

54. big investors who got in at $38 when it went public?

[polichick]

55. Look up the criteria for getting in before the IPO - for each investment house...

Funny how those who use that eye-rolling emoticon often don't know what they're talking about.

[wordpix]

59. wow, you know everything, right?

I don't think so.

[polichick]

60. I trade enough to know about this...

Too bad you're too lazy to do a little research.

[Chan790]

47. He's selling, I'm buying.

Not quite yet, I think there is more stock-price to be shed...but I'm buying and holding because while it opened overvalued, I think it's currently undervalued a bit and as they revise more efficient ways to generate revenue and expand offerings, I expect value to grow.

In 3 years when it's selling at Google and Apple prices, I'm going to come back to this bookmarked thread to "Told you so."

[unkachuck]

50. "Getting out while the getting's possible?"

....oh dear, nothing has changed with the wall-street casinos?

[fujiyama]

52. Wasn't this already known?

I remember reading before the IPO that Peter Thiel's Accel (the VC firm) and Goldman Sachs were selling many of their shares. I don't remember if the articles mentioned whether or not Zucherberg sold any of his shares until today. That itself was enough for me to take a wait and see approach regarding the IPO (that and the projected profit forecasts and valuation were just out of whack).

I'm not convinced there is any wrongdoing here, aside from typical run of the mill, Wall Street casino style greed. I don't see any evidence that Zuch or anyone else did anything illegal. There were probably a lot of individual retail that may have been screwed, but that's because the Street really is a casino and the house ultimately wins. Investing is fine and all, but no one should go in and buy hundreds of shares of the newest hyped up stock. I remember hearing some were dumping their savings into FB shares. Wow that's dumb!

[Canuckistanian]

53. Um, I know NOTHING about public offerings and CEO behavior

But isn't selling your OWN STOCK less than a week after it goes public sort of an admission of failure?

I mean, shouldn't Zuckerberg be a cheerleader by refusing to sell a single share?

Have other CEO's done the same thing?

[grantcart]

66. First they are required to disclose the sale ahead of time

Second they sold a small fraction, maybe 5% of their holdings.

It is standard for entrepenuers who have huge holdings to sell off a small percentage of their stocks.

In many cases they continue to operate as CEOs for nominal salaries.

[Dreamer Tatum]

56. So let me get this outrage straight.

A guy not known for immense personal wealth starts a phenomenally popular website that attracts investors.

When the stock goes public, meaning other people can acquire some of the equity he owns, he monetizes a small sliver of his holdings according to SEC rules and regulations.

Somehow that's evil? That's ridiculous. His wealth became concentrated in exactly one asset in a matter of minutes. Monetizing to diversify is not only his right, but it's also the smart thing to do.

[tawadi]

57. The SEC should investigate him, as well as Morgan Stanley, JP Morgan, and Goldman Sachs fully

Something smells fishy about the whole thing.