In tomorrow's paper, I'm writing about how the hoo-haa over Facebook's $50 billion valuation is leading to a flurry of heightened social media valuations and funding announcements. In other words, we have a good old-fashioned bubble on our hands.
But did you know that you can buy Facebook shares today? It's done on the grey market, through online platforms such as Sharespost.
In fact, you can buy Facebook shares in an auction this Monday. Because this is the email I just got from Sharespost (and no, it's not fraudulent spam):
"We thought you might be interested in the auction of the shares of Facebook Common Stock our affiliated broker dealer will be having on Monday, January 10th.
There will be a minimum of 175,000 shares of Facebook Class B Common stock committed for sale at the auction. The reserve price will be $27.00 and the auction will be conducted on a sealed bid basis. Buyers at the auction will be prequalified by the broker dealer in advance and will purchase through a single investment vehicle, such that each Seller will contract only with this single entity. Further information about this offering will be sent to you on Monday, January 10th."
That reserve price of $27 is far lower than the $40 to $60 that the stock is currently trading at on Sharespost. Nevertheless it's almost 30% higher than the reserve on the last Facebook stock auction in December.
Obviously a lot of people are trying to buy shares (which are given to Facebook employees through options, including staff at the company's Dublin headquarters) in advance of an expected IPO.
Although Facebook is definitely not a puff of smoke -- the WSJ has reported that it made a $355 million profit for the first 9 months of 2010 -- I would be very wary of investing in such a hyped company.
Adrian,
These articles makes interesting reading on the Facebook valuation and possibly impending IPO:
http://ht.ly/3zrPR
http://ht.ly/3zrPR
E.
Posted by: Thenext50k | January 09, 2011 at 10:27 AM