It seems Peter Thiel is becoming more and more famous by the day. First he's featured in the movie The Social Network. Then he pops up on 60 Minutes for his plan to pay kids $100,000 to drop out of college. It's not that the 44-year-old PayPal co-founder had a particularly low profile to begin with, but the recent disclosure that the first big backer of Facebook (FB) has sold over 90% of his stock has put him back into the spotlight once again.
As much as any insider sale is a bad indicator, or a vote of no confidence in the future prospects of the company, in this case, it's different, or at least more nuanced.
While some are calling for Thiel to surrender his seat on the Facebook board of directors, others are more understanding of his motives and are able to separate his stock sale from the company's future prospects - especially given its shrunken share price.
"He's obviously in the business of doing very early stage investment," says Bruno del Ama, CEO of Global X Funds in the attached video, who oversees the Global X Social Media Index (SOCL). "He is not an investor for the public markets and so he's made the investment, he's done very well and he's moving on."
As tumultuous as large lock-up sales are on any company, it would be hard to argue that FB shares haven't at least momentarily found some sort of support in the $19-$20 range. In fact, del Ama says for all the turmoil that the worst IPO in history wrought on investors, its online peers, investment banks, exchanges and even broader market sentiment earlier this spring, it's all part of the process and pain of becoming a public company. And it may also be a thing of the past. (See: Facebook: The Worst IPO Ever?)
"I think right now the market is more focused on the individual companies [in the social media sector] and their valuations," del Ama says.
Clearly, Facebook's third-quarter earnings due out in October, as well as another even bigger lock-up period expiring in mid-November, will be high-risk events for the stock, but the actual business of running the world's biggest social media website is still unchanged. Similarly, the primary challenge of getting more and more of its massive user base to migrate activity to their mobile devices is also seen as a top priority. It's a goal that del Ama is confident they will achieve.
"There's no question in my mind that over the long term, they'll be successful in monetizing mobile," he says.
If he's right, than there's also no question that shares of Facebook will ultimately be successful too.
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