Thiel Cashes Out the Majority of His Facebook Shares

Facebook

Board Director and initial investor Peter Thiel sold 20.1 million shares on August 16 and 17, according to a

(SEC) filing.

reports that Thiel had previously sold 16.8 million shares in Facebook's Initial Public Offering (IPO) for $640 million profit. Thiel's 2004 half a million dollar investment grossed over one billion dollars cash total. As a partner in the venture capital Founders Fund, Thiel bought into Facebook when the startup was only valued at $4.9 million. The fund held more than 44 million shares. As with many early investors, once Facebook's initial

, Thiel cashed in. Other notable investors that have also sold shares include Accel Partners (57.7 million shares), DST Global (45.7 million shares), Goldman Sachs

(24.3 million shares), and the list goes on. According to a report issued by

approximately 241 million shares were dumped for $9.8 million. As the former founder and Chief Executive Officer of PayPal, Thiel has been a savvy Silicon Valley venture capitalist since he founded Thiel Capital Management in 1996. In 2002, Thiel sold the electronic payment system to eBay

for $1.5 billion. According to

, Thiel also distributed approximately 2 million shares of Facebook stock to investors in the Founders Fund as part of a 10b5-1 selling plan. Thiel still maintains about 5.6 million shares, worth approximately $110 million. Due to their poor performance, there has been a growing trend of early investors cashing out social network stocks. Angel investors

joined other prominent early investors in liquidating 15.99 million and 5.1 million shares of Groupon

this summer, respectively. Zynga's

founder and CEO Mark Pincus, was

of insider trading for selling shares in a secondary market offering in April -- just another social network stock that has been

with

this year. Investors must look carefully at S.E.C. filings and hedge fund's 13K fillings to know where the smart money has come and gone. As it appears now, most early investors are bailing out of the social network sector. Facebook is currently trading at $19.17, down about 4.20 percent for the day. Year-to-date, Facebook is trading down nearly 50 percent in Tuesday afternoon's session.