Early Facebook investor Peter Thiel unloads majority of his shares

One of Facebook’s biggest early investors has sold off the majority of his shares in the company, wasting little time following the expiration of the first lock-up period last Thursday.

According to a Forbes report, Peter Thiel off-loaded 20.06 million of his roughly 25 million shares, netting him somewhere in the region of $400 million. The information was obtained from a Securities and Exchange Commission financial document.

Facebook shares have plummeted in value since the social networking giant went public in May. On Monday, their value dropped below $19, less than half of the $38 launch price.

Despite the fall, Thiel has still made a pretty penny, having invested $500,000 in Facebook in its early days back in 2004, a time when it was still called ‘Thefacebook’.

The end of the first lock-up agreement means early employees and investors holding a combined total of 271 million shares can now sell if they wish to do so, just as Thiel did.

More lock-up agreements will end between now and November, allowing for the potential sale of 1.9 billion shares. In November alone, a further 1.2 billion more shares will become eligible for sale. When that happens, things could go either way for Facebook.

“This date becomes the greatest wildcard,” Brian Wieser of Wall Street research group Pivotal told the Guardian last week. He said much will rest on the social networking site’s next lot of financial results, due in October.

“They may be able to navigate through this. The more they can convince Wall Street of the merits of their story, the more they are likely to generate demand for the shares,” Wieser added.

Concern has been growing among investors about whether the social networking site has the means to generate serious revenue from mobile advertising – an area in which it has so far been struggling to make an impact – with growing numbers of Facebook users turning to handsets and tablets to access the site.

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