Tuesday, August 21, 2012

Facebook, Part Deux

Nearly two years ago, I asked the question, "Did Peter Thiel Make The Single Best Investment In History?"

Today, now that Thiel has sold most of his remaining stake in Facebook, it's a good time to re-examine the math surrounding his investment.

Two years ago, I wrote:
In 2005, Peter Thiel paid $500,000 for a 10% stake in Facebook.

Today, with Facebook's estimated value topping $33 billion, his stake is worth between $2-3 billion. That's a 6,000X return on his capital in 5 years.
As it turns out, this most recent sale came with Facebook's market cap at approximately $50 billion, which means he sold these shares at a price that delivered a 9,000X return. Not too shabby!

Of course, Thiel sold nearly as many shares at the IPO price of $38/share, about double today's stock price of $19 and change. That means that the shares he sold in the IPO represented a 17,000X return.

Pretty exciting. Of course, the more exciting Thiel news I saw recently is that the Thiel Foundation has donated money to a company that is trying to make a 3D printer for meat. I can't wait until I can enjoy BBQ without guilt!

1 comment:

Anonymous said...

You had it right all along. He made his best investment decision 2 years ago; prescient. Thanks.