Facebook Director Unloads 33 Percent Of Facebook Stock

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Marc Andreessen, Facebook’s director has sold approximately one third of his venture-capital firm’s stock in Facebook Inc. (NASDAQ:FB), according to regulatory filings. This is surprising as the stock has begun to perform fairly well in the last few months after finally recovering from its botched IPO last year.

According to a regulatory filing, Andreessen Horowitz, the firm owned by the director, sold 2.28 million shares in the company on November 6th. The price of the shares was between $49 and $50 each, according to the paperwork filed with the Securities and Exchange Commission.

The company retained 4.57 million shares in the social networking company, which is still a sizable investment chunk. According to Margit Wennmachers, a spokesperson for Andreessen Horowitz, the firm felt its investment was successful. She also noted that the company still held a lot of faith in the social network, which explains why two thirds of its shares were retained.

Friday’s closing price was $47.53 per share, a $0.03 drop from its opening price. Currently the stock remains flat as of 9:25 a.m. on Monday.

Andreessen’s Other Interests

Other than his involvement with Facebook Inc. (NASDAQ:FB), Marc Andreessen has had success with other companies in the past. He helped kick off Netscape, a browser company that was later acquired by AOL in 1999. Andreessen Horowitz is his real baby though. The venture-capital firm has invested in some of the hottest startups in the last few years. The list includes Facebook,Twitter, Pinterest, Groupon, and Zynga.
The company’s continued involvement with Facebook seems to indicate that Andreessen believes the stock will continue to prove profitable.

What’s Next For Facebook?

Facebook has grown its revenue in 2013 by increasing ads in newsfeeds, improving its mobile ad platform, and boosting its user engagement. However, recent reports indicate that its teen user base in shrinking. This generation may not seem like a big money-maker, but it’s important to remember that today’s teens are tomorrow’s investors.

Facebook needs to concentrate on maintaining the interest of the younger generation because this will be the people who will boost its revenue in coming years. If the social network loses the interest of these users, then it could very well go down the tubes, much like MySpace has.

Who Else Is Selling Off Facebook Stock?

Andreessen is not the only person to unload massive numbers of Facebook Inc. (NASDAQ:FB) shares in the last few weeks. Dan Niles, the CIO of AlphaOne Capital Partners unloaded the company’s entire stake in the social networking giant before the earnings release for the last quarter.

According to Niles, he felt that expectations were too high for the company, and he was worried over the lack of plans to boost the number of ads for its users. He pointed out that if the company did not increase the number of relevant ads that are displayed to users, the only way to boost revenue was to either raise the rates for advertising or attract more users.

Niles said he still sees value in the company and if the stock were to fall well below its current trading level he would buy back into the company. He bought his shares at less than $20 per share, which left him with a healthy profit in his pocket when he sold out.

What do you think? Is Facebook a valid investment, or should investors sell their stakes and move on to a more profitable business model? Let us know in the comments below.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.