By Douglas MacMillan, Keach Hagey and Deepa Seetharaman
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 16, 2018).
Billionaire investor Peter Thiel is relocating his home and
personal investment firms to Los Angeles from San Francisco and
scaling back his involvement in the tech industry, people familiar
with his thinking said, marking a rupture between Silicon Valley
and its most prominent conservative.
Mr. Thiel has also discussed with people close to him the
possibility of resigning from the board of Facebook Inc., the
people familiar with his thinking said. His relationship with the
social-networking company -- where he has been a director since
2005, the year after its founding -- came under strain after a
dispute with a fellow director over Mr. Thiel's support for Donald
Trump's presidential campaign and a related confrontation over
boardroom leaks with Chief Executive Mark Zuckerberg last summer,
the people said.
However, Mr. Thiel feels he can still help the company and is
likely to remain on the board at least for now, one of the people
said.
Mr. Thiel's plans are part of a broad move by the venture
capitalist, who has ties to dozens of top startups, to reduce his
direct role in the Silicon Valley tech industry that he helped to
shape, the people said. Mr. Thiel has grown more disaffected by
what he sees as the intolerant, left-leaning politics of the San
Francisco Bay Area, and increasingly pessimistic about the
prospects for tech businesses amid greater risk of regulation, they
said.
As a result, after spending most of the past four decades in the
Bay Area, the 50-year-old plans to permanently move into the
7,000-square-foot home overlooking the Sunset Strip that he bought
six years ago, a person familiar with the matter said. He also will
move Thiel Capital and Thiel Foundation, two firms that oversee his
investments, into new Los Angeles headquarters this year, the
person said.
Mr. Thiel has long stood out in Silicon Valley for his vocal
libertarianism, but he drew heavy criticism from many tech-industry
peers -- including fellow Facebook board member Reed Hastings,
chief executive of Netflix Inc. -- when he backed Mr. Trump's
presidential campaign and later served as an adviser on his White
House transition team.
Mr. Thiel has recently said tech culture has become increasingly
intolerant of conservative political views since Mr. Trump's
election, an attitude he has said is intellectually and politically
fraught.
"Silicon Valley is a one-party state," Mr. Thiel said last month
at a debate about tech and politics at Stanford University. "That's
when you get in trouble politically in our society, when you're all
in one side."
His concerns are echoed by other conservatives in tech who say
they feel alienated by the industry's broad embrace of liberal
values. A majority of the tech workers who responded to a recent
survey by Lincoln Network, an advocacy group for conservatives and
libertarians in the tech sector, described the cultural norms of
their workplace as liberal. More than one-third of workers who
identified themselves as conservative said the clash between their
views and those of colleagues kept them from doing their best
work.
Mr. Thiel has bucked Silicon Valley conventions since his days
as a Stanford University student in the 1980s, when he helped start
a student newspaper to promote conservative views. He co-founded
PayPal in 1998 and placed an early bet on Elon Musk's rocket
startup, Space Exploration Technologies Inc., in 2008. He also has
backed more unusual initiatives such as an institute that advocates
creating ocean-based cities outside the reach of governments.
His involvement with Facebook has been among Mr. Thiel's biggest
triumphs. He made the first outside investment in the fledgling
social network, paying $500,000 for a 10% stake in 2004. Today,
Facebook is valued at over $500 billion and used by more than two
billion people a month. Mr. Thiel has made more than $1 billion
from the investment.
Mr. Thiel also has been an emissary for Facebook to its large
population of right-leaning users. In May 2016, after media reports
that curators of Facebook's "trending topics" feature suppressed
news about conservative events and from conservative sources, he
helped Facebook convene a closed-door meeting to smooth things over
with a group of prominent conservatives.
Mr. Thiel's support for Mr. Trump that year drew criticism
within Facebook, ranging from rank-and-file workers commenting on
employee message boards to Mr. Hastings. In a 2016 email to Mr.
Thiel, Mr. Hastings called his support of Mr. Trump
"catastrophically bad judgment" and questioned his fitness to
remain on the board, according to a copy of the message reviewed by
The Wall Street Journal. The contents of the email were reported
last year by the New York Times.
Mr. Zuckerberg publicly deflected the criticism of Mr. Thiel,
saying in March 2017 that demands for his removal were "crazy" and
that "ideological diversity" had become a necessary component of
general diversity in the workplace and boardroom.
Late last summer, the Facebook CEO, concerned about board
discussions becoming public, confronted Messrs. Thiel and Hastings
over whether they had leaked Mr. Hastings's email to the press,
people familiar with the matter said.
In a phone conversation, Mr. Zuckerberg discussed with Mr. Thiel
whether he should remain on the board, the people said. The
Facebook CEO didn't explicitly ask Mr. Thiel to resign, someone
familiar with the situation said, and Mr. Thiel said he wouldn't
leave the Facebook board voluntarily.
Mr. Hastings offered to resign if his disagreement with Mr.
Thiel was a distraction, and Mr. Zuckerberg said no, according to
someone familiar with the matter.
While Mr. Thiel has remained a director, in November he sold
73%, or almost $30 million, of his remaining stake in Facebook,
according to securities filings.
Mr. Thiel has courted controversy unrelated to his politics. He
secretly financed wrestler Hulk Hogan's lawsuit against online
publisher Gawker Media, which resulted in a $32 million judgment
that ultimately forced the company out of business. He later said
the move was motivated by a Gawker story in 2007 that identified
Mr. Thiel as gay, which he said violated his privacy.
Speaking at the Republican National Convention in 2016, Mr.
Thiel said, "I am proud to be gay."
Last November, Mr. Thiel demanded that a U.S. Bankruptcy Court
in New York allow him to participate in a continuing sale process
for Gawker.com. Mr. Thiel's lawyers have argued that he is the
"most able and logical purchaser" for Gawker but that so far his
requests to participate in the sale process have been rebuffed.
The investor's new projects in Los Angeles will include the
creation of a new media endeavor, one of the people said. Mr. Thiel
sees an opportunity to build a right-leaning media outlet to foster
discussion and community around conservative topics, the person
said.
Thiel Capital and Thiel Foundation plan to move their dedicated
staff of about 50 employees to Los Angeles, where they will
continue to oversee Mr. Thiel's personal holdings, one of the
people familiar with his thinking said. Other investment firms
associated with Mr. Thiel, including Founders Fund and Mithril
Capital, will remain in San Francisco, the person said.
In the past two years, Mr. Thiel has exited the boards of
Zenefits and Asana Inc., cut ties with startup incubator Y
Combinator and sold off the majority of his stakes in Twilio Inc.
All are located in the Bay Area. He still serves on the boards of
several companies, including Palo Alto, Calif.-based data-mining
firm Palantir Technologies Inc.
Mr. Thiel paid $11.5 million for his Los Angeles home in 2012,
according to real-estate data website Property Shark. He also has a
home in New Zealand, where he was granted citizenship in 2011. He
has been living near San Francisco's Presidio District, where his
office is located.
Write to Douglas MacMillan at douglas.macmillan@wsj.com, Keach
Hagey at keach.hagey@wsj.com and Deepa Seetharaman at
Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
February 16, 2018 02:47 ET (07:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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