Topic:

Private Shares

Private Shares

Buyers are Paying a Huge Premium on the Stock of Private Tech Companies

(facebook.com)

Companies that facilitate the trade in private shares of tech companies like Facebook and Twitter also provide third party research so that buyers can get a sense of what experts think these firms are worth. It’s important, since the financial health of these companies is pretty opaque. A few figures on revenue and profit margins have circulated, but there is no way for an individual investor to confirm these numbers.

Not surprisingly, companies like Facebook command a pretty huge premium. On Sharepost, two of the three estimates peg the social networks value between 10 and 13 billion dollars. In the meantime, the stock is fetching upwards of $70 billion at auction. And these aren’t just investors hoping to capitalize on flip when the company goes to IPO. “Want to purchase 1000 shares at $30…kids college fund,” writes one Sharepost user.¬† Read More

Private Shares

The Movement to Ban Dumb Tech Investors is Growing

accredited investor

One of the most interesting and tectonic shifts in the world of tech start-ups has been the emergence of robust markets for buying and selling private shares.

The SEC’s announcement last week that it is was considering relaxing the rules around private shares was met with strong reaction from the VC community.

New York investor Roger Ehrenberg penned a post this morning for Fortune arguing that the private markets were in need of some rationality. Read More