Peter Thiel Misses Out on $14.76 Billion After Selling Facebook Shares

Billionaire Peter Thiel, the first outside investor in Facebook, may now be experiencing some regret over the timing of his exit from the company. Just months after Facebook's initial public offering (IPO) in May 2012, Thiel sold approximately 20.1 million shares at prices ranging from $19.27 to $20.69 per share, which netted him around $400 million at the time. However, had he held onto those shares, they would now be worth approximately $14.76 billion, given the current stock price of $736 per share.

Thiel's initial investment in Facebook was made in 2004 when he contributed $500,000 for a 10% stake in the company, valuing it at around $4.9 million. His decision to invest was driven by his belief that the college market, which was Facebook's original audience, had been underestimated by other investors. "I think investors always have a bias to invest in things they themselves use and they undervalue things they don’t use so they aren’t many investors who are in college," Thiel said in a 2015 interview.

Despite selling a majority of his stake, Thiel remained actively involved with Facebook for many years, serving on the company's board until 2022. Mark Zuckerberg, Facebook's cofounder and CEO, expressed his gratitude for Thiel's contributions, stating, "Peter has been a valuable member of our board and I’m deeply grateful for everything he has done for our company—from believing in us when few others would, to teaching me so many lessons about business, economics, and the world."

Thiel's net worth, currently estimated to be around $21.7 billion, is largely attributed to his roles as a cofounder of PayPal and Palantir. His experience with Facebook is a reminder of the risks and rewards inherent in investing, particularly in the tech industry. While Thiel's decision to sell his shares may have seemed prudent at the time, the subsequent growth of Facebook's stock price has highlighted the potential for significant gains that could have been realized had he held onto his investment.

Thiel's situation is not unique among early investors in successful tech companies. Ronald Wayne, Apple's third cofounder, sold his 10% stake in the company for $800 just 12 days after signing the contract. Wayne's shares could now be worth between $75 billion and $300 billion, thanks to Apple's current market capitalization of $3 trillion. Wayne has since admitted that while he had no regrets at the time, it would have been beneficial not to have financial worries. He has relied on renting out part of his property and cashing his monthly Social Security check to make ends meet.

Thiel's experience serves as a cautionary tale for investors, underscoring the importance of timing and the potential for significant gains or losses in the tech industry. While Thiel's decision to sell his shares may have seemed prudent at the time, the subsequent growth of Facebook's stock price has highlighted the potential for significant gains that could have been realized had he held onto his investment. The story of Thiel and Facebook is a reminder of the risks and rewards inherent in investing, particularly in the tech industry, and the importance of making informed decisions based on market conditions and individual investment goals.