Facebook Director’s Share Sale Lacks Precedent

Early investor Peter Thiel's $1 billion sale is unusual for Silicon Valley.

Peter Thiel’s decision to sell almost all of his stake in Facebook Inc. so soon after company’s initial public offering has few precedents in Silicon Valley, where venture capitalists typically hold shares longer.

Thiel, a Facebook director and its first outside investor, divested 72 percent of his remaining shares three months after it went public. Of the 40 biggest U.S. technology IPOs since the end of 2010, only Facebook and its underwriters let some backers sell so soon, with every other company adopting a so-called lock-up period about twice that long.

Harvesting Gains

In some instances, underwriters reserve the right to release some shares before the lock-up expires. In Zillow Inc.’s IPO, holders were allowed to sell a quarter of their shares after 90 days if certain conditions were met in the stock performance.

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