Secondary Markets

Secondary Markets Face Harsh Reality of a Post-Facebook IPO World

Things changed.
664581789 439375f013 z Secondary Markets Face Harsh Reality of a Post Facebook IPO World

A post-Facebook world. (flickr.com/darkworks)

Last year’s booming secondary market is this year’s existential question: for SharesPost and Second Market, is there life after Facebook? Both companies, which grew quickly along with the private market demand for Facebook shares, are dealing with revenue losses now that Facebook is no longer trading privately.

Although CEO Barry Silbert said in February that the company is hiring and “completely prepared to fill the hole” left by Facebook, today Second Market confirmed layoffs in advance of Facebook’s IPO. Facebook shares accounted for a third of Second Market’s revenue, the New York Times reported in February; so maybe a 10 percent layoff isn’t so bad–thought it’s little consolation to¬†the 15 Second Market workers who no longer have a job and must re-live their resentment every time they sign on.

“In a post-Facebook world, we have decided to eliminate some positions that are no longer core to our company’s long-term mission,” SecondMarket said in an email to the Wall Street Journal. (We’re imagining the pink slip: “Sorry, team, it’s a post-Facebook world out there…”)

So where do private markets go from here? The Journal¬†points out that “the pipeline of companies beyond Facebook appears to be thin,” and the recent JOBS Act, which lightens regulations around investing, could potentially chip away at the public’s appetite for private startup investments.

Second Market isn’t attempting to replicate the Facebook frenzy with a sexy new product, instead pushing investors to snatch up shares in private community banks. SharesPost may not be ready to move on; Facebook still tops its “most active” index.

Follow Adrianne Jeffries on Twitter or via RSS. ajeffries@observer.com