Facebook's insiders and executives have cashed out of a bounty of stock since the company's initial public offering. Their reward: $7.2 billion.
On the eve of the social network's second anniversary as a public company, an analysis by Bloomberg News shows that the company's top holders have executed transactions totaling at least 186 million shares over that period, reaping them $7.2 billion.
Eleven holders have each sold more than $100 million of stock, including Chief Executive Officer and co-founder Mark Zuckerberg, Facebook underwriter Goldman Sachs and early investor and director Peter Thiel.
The analysis shows how Facebook insiders and executives are locking in gains from the company's shares amid ups and downs.
The Menlo Park, California-based social network priced at $38 a share on May 17, 2012, and began trading the day after. It soon fell below its IPO price as investors questioned its business, before roaring back last year as its mobile advertising flourished.
The shares have been under pressure in recent months and are down 19 per cent from an all-time high in March through Friday.
The stock sales aren't unusual for newly public Web companies including LinkedIn, Groupon and Zynga. Some of Facebook's top executives, including Chief Operating Officer Sheryl Sandberg and Chief Financial Officer David Ebersman, have established regular share-sale plans, part of a trend of adoption of such programs.
"This behaviour is typical of a company that goes public and the executives start to sell," said Aaron Boyd, a director of governance research at compensation-research firm Equilar in Redwood City, California. Still, he added that "the size of Facebook and the scale to which these shares are valued is atypical."
Tucker Bounds, a spokesman at Facebook, declined to comment.
Bloomberg's analysis looked at holders whose stakes were disclosed at the time of the IPO, and who have documented their share sales since in filings through to May 15. The study encompassed Facebook's Class A shares, which can be sold on the open market. The Class B shares, which carry 10 votes each, are convertible to A shares.
Insiders as a whole still hold the majority of their shares. Of those who have sold some shares, Zuckerberg has cashed out the most, reaping $3.41 billion, mostly to cover tax obligations.
Goldman Sachs made the second-most from its sales, at $914.1 million. They were followed by Thiel's investment vehicle, Rivendell 1, garnering $861.5 million, according to data compiled by Bloomberg. Thiel has also sold through other investment vehicles, so his total proceeds are more than $1 billion.
Michael DuVally, a spokesman for Goldman Sachs, declined to comment. Erin Gleason, a spokeswoman for Thiel's venture firm Founders Fund, didn't respond to a request for comment.
Only three insiders and executives haven't disclosed any sales of Facebook shares since the IPO. They are Facebook co-founder Eduardo Saverin and board members Erskine Bowles, who was White House Chief of Staff for President Bill Clinton, and Reed Hastings, who is Netflix's CEO.
Bowles and Saverin didn't respond to emails for comment. Jonathan Friedland, a spokesman for Netflix, declined to comment.
Some insiders sold near Facebook's share-price lows. In four of the top 10 days that holders made money off shedding Facebook, the shares were trading at less than $25, according to data compiled by Bloomberg. Venture capital firm Accel Partners and board member Marc Andreessen, along with Thiel's Rivendell, were among the sellers at those levels.
Bloomberg LP, the parent of Bloomberg News, is an investor in Andreessen's venture firm Andreessen Horowitz. Representatives for Accel and Andreessen didn't respond to requests for comment.
Much of the wealth has trickled back into Silicon Valley, boosting home prices and providing capital for new startups. Accel and Andreessen Horowitz are prolific startup investors.
The day that Facebook insiders and executives made the most was right after Christmas 2013. On December 26 last year, several stakeholders sold Facebook shares, cashing out $2.37 billion, according to the data.