San Francisco: Facebook director Peter Thiel sold most of his stake in the operator of the world’s largest social-networking website, bringing his proceeds to more than $1 billion (Dh3.67 billion), after restrictions on insider sales ended.

Thiel, one of Facebook’s earliest investors, sold about 20.1 million shares in the company on August 16 and August 17, raising $395.8 million, according to a filing on August 20 with the US Securities and Exchange Commission.

Thiel, a venture capitalist and hedge-fund manager, had already generated $640.1 million in sales during the initial public offering.

With an investment of $500,000 in 2004, Thiel is one of the biggest beneficiaries of Facebook’s gain before going public. Later backers haven’t fared as well, with the stock losing almost half its value since the IPO amid signs that the company’s growth is slowing and concerns that more insiders will exit their stakes. The sales disclosed on August 20 were tied to a plan adopted on May 18, Facebook’s first day of trading.

“As of last May, he had basically handed over discretion about these sales,” said Stephen Diamond, associate professor of law at Santa Clara University.

Jeremiah Hall, a spokesman for Thiel, and Ashley Zandy, a spokeswoman for Facebook, declined to comment.

Facebook last week unlocked 271.1 million shares, the first of five insider-sale restrictions scheduled during the company’s first year as a public company. Another 1.44 billion shares will be freed up through November.

Shares in Menlo Park, California-based Facebook rose five per cent to $20.01 at the close in New York on Monday.

Accel distribution

Another Facebook investor, Accel Partners, distributed more than 50 million shares to investors in the venture capital firm’s funds on August 16, according to another filing on August 20.

Thiel’s sale, at prices from $19.27 to $20.69 a share, represents most of the 27.9 million shares the investor held after the IPO. He still holds more than five million shares, and the proceeds don’t reflect underwriter or broker fees.

Thiel freed up extra shares for sale when he converted more than nine million shares to Class A from Class B, according to a document filed August 10 with the US Securities and Exchange Commission.

As a co-founder of PayPal, he served as chief executive officer until the company was bought by EBa for $1.5 billion in 2002. Thiel, who’s also a member of the so-called “PayPal Mafia,” used his fortune to start hedge fund Clarium Capital Management and to invest in start-ups.

One of those start-ups was Facebook, a social-networking service devoted to college campuses at the time of the investment in 2004. Thiel also participated in a $25 million funding round in 2006 when the company was valued at $500 million.