Twitter may be the hot social network stock right now, but don’t forget that one their biggest rival is doing pretty well for itself too.
Shares of Facebook have been seeing a pretty remarkable turnaround since its impressive second quarter earnings report, more than doubling in that timeframe. And now some of its biggest investors are looking to cash in.
Case in point: Andreessen Horowitz, which just decided last week to sell of a third of its Facebook shares, according to a regulatory filing with Securities and Exchange Commission.
The firm sold roughly 2.3 million shares of the stock for between $49 and $50, dated on November 6th. the total amount made in the transaction was roughly $111 million. Andreessen Horowitz still holds 4.57 million shares in the company.
So why sell now? Because the firm wants to return cash to its investors, Margit Wennmachers, partner at Andreessen Horowitz, told AllThingsD.
“Venture investing involves a lot of experimentation,” said Wennmachers. “Not all of them work. This one worked.”
But she also made sure to reiterate the firm’s belief in the company.
“We’re still feeling very good about Facebook,” Wennmachers said.
A good time to sell?
This is probably a pretty good time for Andreessen Horowitz to cash out. Facebook’s stock has done remarkably well over the last few months, but trouble may soon be on the horizon.
In its second quarter earnings report, Facebook posted revenue of $1.181 billion for the quarter, beating Wall Street’s estimates of $1.62 billion, and up 53% from $1.18 billion in the second quarter of 2012.
Investors were impressed by the gains the company reported in mobile, in both revenue and users.
Monthly active users (MAUs) were 1.15 billion as of June 30, 2013, an increase of 21% year-over-year, while mobile MAUs were 819 million as of June 30, 2013, an increase of 51% year-over-year. Meanwhile daily active users (DAUs) were 699 million on average for June 2013, an increase of 27% year-over-year, while mobile DAUs were 469 million on average for June 2013.
Facebook’s percentage of mobile ad revenue has been increasing every quarter: mobile accounted for 30% of that revenue in Q1,, up from 23% in the fourth quarter of 2012, and up approximately 14% in the third quarter.
At the end of July the stock was trading at $26.51 a share. It hit $45 for the first time in early September, more than doubling its price in that time. It reached up to $50 just a couple of weeks later, and peaked at $54.22 on October 18th.
Since the end of October, however, things have been a bit more shaky. That coincides with the company’s third quarter earning results, which handily beat expectations and, once again, showed growth in mobile and advertising.
The problem is that Facebook’s Chief Financial officer said this In a conference call following the report:
“We did see a decrease in daily users specifically among younger teens.”
The issue of teens fleeing Facebook has one they have been dealing with for a while, and have always denied.
Since those 12 word were uttered, Facebook’s stock has only ended above $50 two times. On Friday, it decreased 0.06%, or 3 cents, to $47.53. That is its lowest level since October 9th.
The loss of teens seems to have spooked investors, and so this might have been a good time for Andreessen Horowitz to make some money while it can.
Vator has reached out to both Facebook and Andreessen Horowitz for comment, but neither was available at this time. We will update if we learn more.
(Image source: http://readwrite.com/tag/facebook)
