Secondary market facebook stocks

Secondary market facebook stocks

Posted: ketzan Date of post: 08.07.2017

In filing for its imminent initial public offering, Facebook included this sample of a stock certificate.

secondary market facebook stocks

The company's stock has been sought by investors on private markets. Very soon, Facebook will go public. That means anyone will be able to buy shares of the social networking giant on the Nasdaq exchange.

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But sophisticated investors have already been buying pieces of Facebook and many other hot tech stocks, on private exchanges. And now it seems that trading in private company shares is poised to grow, thanks to recent changes in the law. Tradition says that the life cycle of a new company might look something like this: But today, some companies are postponing that step.

They're staying teenagers for longer, and hanging out in private, secondary markets, where investors like Talmadge O'Neill can find them. It's a lot of cash. And O'Neill made every one of these purchases without ever seeing a quarterly earnings statement.

In the market for private company shares, it's not required. Facebook founder Mark Zuckerberg speaks in a video that is part of the company's prospectus for investors. By remaining a privately held company, Facebook has helped boost the popularity of secondary stock markets.

The news that I read on TechCrunch or All Things Digital, or any one of these technology blogs, it all looks good. In just a few years, trading in private company shares has grown from practically nothing to several billion dollars' worth of transactions. Fueling that growth is the boom in technology startups like Twitter, Hulu and Spotify.

Employees at these companies sometimes get part of their pay in stock.

Facebook: What’s Next for Secondary Markets - Total Return - WSJ

After a few years, staffers may want to cash out. Secondary markets like SharesPost and SecondMarket match sellers to buyers. The Securities and Exchange Commission doesn't directly oversee what are known as secondary markets. The biggest platform for trading in private shares is SecondMarket, in downtown Manhattan. On its trading floor, men and a few women sit at computer terminals.

secondary market facebook stocks

Around the corner, there's a foosball table and a pantry, where all or so employees are allowed to take a beer from the fridge on a Friday afternoon. SecondMarket is eight years old, and it has a startup atmosphere. Ali Byrd, a senior vice president, says that SecondMarket has tightened its procedures and now requires companies to disclose their financial condition to buyers.

Still, it's well short of the quarterly reports, internal controls and auditing required of public companies.

secondary market facebook stocks

Earlier this year, SecondMarket laid off 10 percent of its staff. The likely reason is that its biggest attraction, Facebook, is about to go public.

But even without Facebook, there are reasons to believe private markets will thrive. Last year, SecondMarket's founder and CEO, Barry Silbert, appeared before Congress three times. He asked lawmakers for changes that would help his business grow: That's just a guess, of course.

Why I Am Buying Facebook Stock

The more immediate effect will be that successful startups can push back the point at which they need to do an IPO. Instead, they'll be able to live up their teenage years in lightly regulated private markets. Accessibility links Skip to main content Keyboard shortcuts for audio player.

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