From the Fairy Godmother blog comes news of action in the secretive private market for Facebook shares. The questions that it raises, aside from whether this is a real or manipulated market concern what metrics underlay the original valuation, how large the market is and whether the market activity is statistically correllated (or even causally so) with the company's actual performance. Stay tuned:
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.
To Facebook market participants:
Thank you to those who participated in this week’s SecondMarket auction for Facebook shares. The auction was successful and partially cleared (94.6%) at a per share price of $26.25. Next week, the floor price will be $24.96 and we will require a minimum sale of 25,000 shares.
If you own shares that you are eligible to sell and wish to participate as a seller, please complete the attached Seller Information Form and submit it to SecondMarket at fb@SecondMarket.com by Monday, January 31 at 7:00 PM EST. To verify receipt of your sell order, you must receive a confirmation email from fb@SecondMarket.com. If you do not receive a confirmation email, your sell order has not been received by SecondMarket and may be excluded from the auction.
Please see below for detailed results on previous auctions and for next week’s auction timeline.
Previous Auction Results:
Total Shares Cleared to Date: 3,391,265 over six auctions
Clearing Price in Most Recent Auctions:
January 24, 2011: $26.25
January 12, 2011: $28.26
December 15, 2010: $22.75
December 8, 2010: $21.90
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