As Erick wrote last week, SecondMarket, the marketplace for alternative investments, has been seeing quite a bit of activity of late. In fact, SecondMarket’s private stock transactions in the first three quarters of 2011 totaled $435 million, a 73 percent increase over the same period last year. SecondMarket lays out all these stats and more in its third quarter report, including the breakdown over who exactly is purchasing these shares. Interestingly, VCs made up less than 1 percent of transactions (and only 0.2 percent by dollar amount) last quarter.
But, today, SecondMarket is announcing that it has received some serious outside investment of its own. The marketplace today closes a $15 million series C round, led by The Social+Capital Partnership, the new venture fund established by former Facebook VP Chamath Palihapitiya. The former Facebook and Aol VP will also be joining SecondMarket’s board of directors. → Read More
Demand for private company shares declined in the second quarter versus the first quarter but was up sharply year-over-year, according to a new report released today by SecondMarket. The market for private company stock saw $112 million in transactions last quarter, versus $156 million in the first quarter, or down 39 percent sequentially. On an annual basis, however, it was up 120 percent over the second quarter of 2010, which saw $51 million in transactions. And the $268 million worth of transactions in the first half of 2011, was up 75 percent from the first half of 2010 .
For the first time, SecondMarket also ranked the top VC firms based on which ones have the most portfolio companies on its 100 most-watched list. → Read More
I find myself conflicted about secondary markets. My cautionary side wonders how these private stock sales can potentially distort incentives within companies and artificially impact valuations. The libertarian side of me, however, says all in business is fair game. Everything can be bought or sold. Everyone has a price.
There’s clearly supply and demand in this market, but its effects are unclear and hard to quantify. On one hand, there’s something not-quite-right about the high wealth requirements needed to purchase shares on secondary markets, the opacity of financial information required to be disclosed within each transaction, and the indirect effects trade volatility can have on a private company’s valuation.
On the other hand, if capital markets aren’t ready for public offerings, especially in relatively new industries, and if founders and employees have worked long enough to have their shares vest, and if other investors are interested in owning a piece, why should the government or the company in question regulate or block the transaction? → Read More
Facebook shares on private secondary markets like SecondMarket and SharesPost spiked briefly in March to $34 – an $85 billion valuation. But they settled down to around $31.50 after that and have mostly stayed around that level since then. But something caused the shares to surge past that old record to a solid $35 per share in this week’s auction. Our guess is that newly public LinkedIn’s somewhat impressive P/E ratio of 2,500 may have something to do with it.
$35 per share values Facebook at roughly $87.5 billion. Which is a steal compared to the way the public markets are valuing LinkedIn. → Read More
Now that LinkedIn has stock is trading publicly,, you can buy and sell shares of the company on the New York Stock Exchange. But its shares have traded before privately among wealthy individuals and other accredited investors on secondary markets such as SecondMarket. The chart above shows the price history of LinkedIn’s stock between April, 2010 and March 2011 on SecondMarket.
On SecondMarket, LinkedIn’s value per share in April, 2010 came in at $14.50 and steadily rose to $35 by March, 2011. Yesterday, LinkedIn priced its IPO at $45 per share on the NYSE, giving the company a valuation of $4.5 billion. Today, the company began trading publicly at $83.00 per share, an 84 percent increase from $45 per share. That’s a $7.8 billion market cap. And shares have been trading as high as $122 per share today. → Read More
Are sales of private company shares taking a breather? Demand for private company shares resulted in $115.4 million worth of transactions on SecondMarket during the first quarter of 2011, down from $120 million last year. The value of shares trading hands was also down from $158 million in the fourth quarter of 2010, according to its first quarter report.
The biggest buyers were high net-worth individuals, who accounted for 59 percent of completed transactions, compared to only 18 percent last quarter. VC funds stopped buying completely during the quarter, whereas the quarter before they made up a whopping 43 percent of completed transactions (with mutual funds making up another 13 percent). → Read More
Just 10 days ago, we noted that Facebook had hit a new valuation record as shares on the secondary markets surged some 5 percent to $31.50 a share. That auction was through SecondMarket and put the on-paper valuation of the company at roughly $78.75 billion (based on roughly 2.5 billion shares outstanding). Today — again, just 10 days later — we have another Facebook share auction that has closed. And unbelievably, the price now is at $34 a share. That’s an even $85 billion valuation.
I repeat: $85 billion. → Read More
A little over $8 million changed hands in this week’s SecondMarket Facebook shares auction. And the price surged $1.50 per share, or about 5%, over last week’s record price of $30/share. 257,422 shares were bought and sold.
That values Facebook, with roughly 2.5 billion shares outstanding, at $78.75 billion. Or, 17 Twitters and change.
The confidential (lol) email and part of the attached report is below, and we’ll soon be updating our Facebook valuation chart. → Read More
Last week, in our weekly report on the insanely hot Facebook stock trading going on behind the scenes on SecondMarket, I wrote the following: “Do I hear $75 billion next week?” I was sort of kidding. But it looks like the joke is on me!
Sure enough, Facebook did hit a $75 billion valuation on SecondMarket this week, a new record. → Read More
And we’re back again with our now weekly update on the insanity surrounding Facebook’s stock in the SecondMarket auctions. Last week, the stock saw the beginning of a rally back to $27 a share, good for a $67.5 billion valuation (based on roughly 2.5 billion shares outstanding). This week, the good times continued to roll. Facebook’s stock hit $28 a share, to push the valuation of the company back to a cool $70 billion or so.
This is still slightly off the record high of $28.26 a share (a $70.65 billion valuation) set in mid January, but it’s clear that Facebook’s stock is storming ahead once again, and quickly. This was the 11th auction SecondMarket has done on the stock. → Read More
Kevin Rose and Tim Ferriss have made a co-investment in Facebook on the secondary market. In this video clip posted this week, Rose announces that he and Ferris recently invested in Facebook “before the craziness.” We’ve embedded the video below; Rose talks about the investment just after the 34 minute mark.
We confirmed with Rose that he and Ferriss actually bought shares on secondary market SecondMarket at a $45 billion valuation. We’re told the deal was in the seven figures. The ‘craziness’ Rose is referring to is Facebook’s recent $1.5 billion funding round from Goldman Sachs and DST at a $50 billion valuation, and the possibility of an IPO for the network by April 2012. → Read More
A week ago Facebook shares were being traded at $28.26 per share, a $70 billion valuation. In this week’s auction at SecondMarket the per share price declined just over 7%, to $26.25, a $65.5 billion valuation with around 2.5 billion shares outstanding. That’s a $5 billion decline in valuation. 670,000 shares were sold for a total of around $17.5 million.
Did it peak? I have no idea. We still have to update our two week old chart showing a high valuation of $50 billion. Maybe things are just cooling down for a while. We’ll know more after next week’s super confidential Facebook share auction.
Here’s the email. → Read More
With shares of Facebook recently hitting a $70 billion valuation in a private auction on SecondMarket, you’d think those are the only shares that trade on the private stock market Facebook did make up the biggest portion of trades (39%) in the fourth quarter of 2010, but the market for private shares is broad and demand is strong for all sort of shares from LinkedIn (7%) and Etsy (5%) to Chegg (2.5%)and Bloom Energy (2.5%). Last quarter, SecondMarket handled $158 million worth of private stock trades, a little more than double the $75 million worth in the third quarter. For the entire year, SecondMarket handled $400 million worth of private trades. → Read More
The SecondMarket Facebook shares auctions are back on after a holiday break, and the valuation is up big time. The last auction prior to this one closed December 15 at $22.75/share. Today it hit $28.26 per share. With 2. 5 billion or so shares outstanding, that’s a $70.65 billionish valuation. A month and a half ago shares were trading on SecondMarket at a $50 billion valuation.
What’s changed? The Goldman Sachs investment announced earlier this month increased the hype even further. No wonder the SEC is starting to pay attention to these trades.
Sounds like Accel Partners may have sold a little before the peak. → Read More
Just as the Securities and Exchange Commission is starting to take a closer look at the increasing amount of trading in private company stock, a new startup that’s been in stealth mode since August, 2009 is preparing to launch another way to trade private shares. The company is Xpert Financial which, through its registered subsidiary, Xpert Securities, brings to the table a tacit stamp of approval from the SEC and the Financial Industry Regulatory Authority (FINRA), or at least approval to begin operations as an alternative trading system (ATS). Existing secondary markets for private shares such as SharesPost and SecondMarket do not have the same standing in the eyes of the SEC, although it is not clear how much that matters at this point.
Xpert Financial will operate an electronic trading platform for private company shares. It is a registered broker-dealer with FINRA and it recently got approval from the SEC to run an alternative trading platform. Xpert Financial will be the first ATS approved for private stock sales. More common alternative trading systems are ECNs, or Electronic Communication Networks, for publicly traded securities. As an ATS, Expert Financial cannot call itself an exchange, which is why it changed its name from Xchange. → Read More
Back in early 2009, I was concerned about the development of private stock secondary market exchanges. I was concerned that it would affect retention of top executives if people were able to cash out before an IPO too easily. I worried companies wouldn’t be careful enough about who they would allow to own chunks of them. I thought it would be just a band-aid for a larger industry problem of companies not wanting to go public early and often. And in the wake of the financial meltdown, I was concerned about people getting burned who were buying the shares on a loosely regulated market.
We’ve seen shades of all of these, but mostly my fears were allayed once we saw these markets in practice.
Why? Because it was clear these aren’t shadow public markets. → Read More
We’ve been tracking these fabulous SecondMarket Facebook stock auctions for the last three weeks. The shares hit a roughly $50 billion valuation in a big auction in late November, when $40 million changed hands. Last week the price edged up 1.2% to $21.01.
This week’s auction has now closed as well. The closing price was $21.90, up 4.2% from last week. Someone actually guessed that price in our TechCrunch tshirt contest (see comments), and we’ll be contacting them and shipping it out right away.
What will next week’s price be? Be right and get a TechCrunch Tshirt. → Read More
It was just a few weeks ago that Accel Partners sold off around half a billion dollars of Facebook shares at a company valuation of $35 billion. If you thought that was insane, and a lot of commenters did, then don’t read the rest of this post. You’ll only get more jealous.
Around $40 million changed hands last week in a Facebook share auction held by SecondMarket. The end price per share was $20.76, and about 1.9 million shares were bought and sold. And based on there being around 2.5 billion shares outstanding after a 5-1 stock split earlier this year, that values Facebook at around $50 billion. As far as we know, this is an all time high.
The email sent out to auction participants is below. A new auction is beginning shortly. We’ve reached out to SecondMarket for comment. → Read More
Private company stock trading startup SecondMarket just released their Q3 transaction report. The highlight – Facebook continues to dominate with 37% of total transactions, although SecondMarket doesn’t break out the total size of those transactions. Nearly $75 million worth of stock flowed through them in the last three months, though (up from $51 million in Q2):
The SecondMarket private company stock market had another strong quarter, with approximately $75 million in completed transactions spread across nearly a dozen companies. Facebook continues to attract the most attention with more than one-third of completed transactions. GlobalLogic, which made up 35% of completed transactions, also had a strong quarter, while new names in the private company market emerged, including Acronis and Gamefly. The types of buyers also continued to diversify with venture capital funds leading the way as the most active buyers in the quarter. The total dollar amount of completed private company stock transactions* on SecondMarket in Q3 2010 was $73,547,122.35.
The World Economic Forum has announced its list of 31 Technology Pioneers for 2011. The Technology Pioneers are its list of up-and-coming startups. Last year’s list included Twitter, Playfish, and Boston Power. The year before, Mint, Etsy, and Brightcove were named.
Joining the pantheon this year are foursquare, Knewton, Layar, Scribd, and Spotify. However, greentech is equally strong on the list, particularly with smartgrid companies such as OPower and Tendril. Below is the full list of infotech companies that made it, with links to their Crunchbase profiles for more information: → Read More
