Facebook shares rise 42% in 4 months

Matt Bowman · November 20, 2009 · Short URL: https://vator.tv/n/bf2

Common stock is trading at $21/ share on SecondMarket, giving the company a $9.5 billion valuation.

 Facebook’s valuation has been all over the map. In 2007, a $240 million investment from Microsoft pegged the company at a whopping $15 billion. After Wall Street imploded, the company plummeted to $3.7 billion in its own estimation, according to court documents discovered by the AP in February of this year. By May it climbed back to $10 billion with an investment from Russian investment firm Digital Sky Technologies. DST then offered to buy up to $100 million in common stock from shareholders at a $6.5 billion valuation in July.

Since then, the company has posted strong numbers, topping 300 million users and declaring itself cash-flow positive in September.

This week, Facebook climbed up back up to a respectable position. On Thursday, SecondMarket, an exchange that allows sophisticated investors to buy private company stock, told Bloomberg that Facebook shares are selling for $21 on the site, giving the company a $9.5 billion valuation. That’s a 42% jump from the going price in July. SecondMarket spokesman Mark Murphy said there have been about a dozen transactions of Facebook shares in the last 60 days, the most recent occurring last week.

On SharesPost, another private company stock exchange, buyers have offered $20 for Facebook shares, up 35% from 3 months ago. SharesPost said the last transaction on the site was 15,000 shares sold for $12 each in August.


Any news about Facebook is fuel for the IPO rumor mill. Paul Bard, a Renaissance Capital analyst, told Bloomberg, "The fact that the stock on these private exchanges moved - I'm sure that has to do with the fact that people think a deal is coming sooner rather than later."

Lise Buyer, who helped run Google’s IPO disagrees. She cites the company’s recent decision to allow employees liquidity just a few months ago. If an IPO were immanent, the argument goes, a company wouldn’t make the potentially embarrassing move of letting employees sell. The higher price simply means that investors who can hang on for a while think that when an IPO does happen, it’ll be at a higher price than the last round paid.

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SharesPost makes private equity liquid by efficiently matching buyers, sellers of private company stock and giving them the information, tools and process to make transactions easy and safe. At SharesPost you can download research reports and corporate documents for hundred’s of private companies, including Facebook, Twitter and LinkedIn. Plus, see prices from previous transactions. When you’re ready, connect directly with buyers and sellers of private company shares without brokers or their commissions. SharesPost provides you with automated contracts and integrated e-signature and escrow services to handle transfer restrictions like company rights of first refusal and help process your transaction.