Facebook Shares Set Record In Final Private Auction, Leaves Some Private Markets Uncertain

At noon on March 30th, Facebook stock traded on private markets for the last time. Shares in the social network closed at their highest price yet: $44.10, which gives the company an implied valuation in the range of $103.65 billion to $110.25 billion. Why two different valuations? It depends on how many shares are outstanding, and that number is difficult to pin down. Two numbers have been quoted: if there are 2.35 billion outstanding shares, the company is worth $103.65 billion; if there are 2.5 billion shares outstanding, the company is worth $110.25 billion. SharesPost, the private market officiating trades in Facebook stock, sent an email to clients after the final trades in Facebook were placed. Below is an excerpt:

Barring something entirely unexpected, this will be our final auction of the shares of Facebook. We would like to thank the more than 1,100 institutions and individuals who participated in our Facebook auctions, resulting in total share and unit sales of more than $425,000,000 (valued at today’s closing price), making SharesPost the most active auction platform for Facebook shares.

SharesPost moved up the final auction date by three days for unknown reasons. According to the Wall Street Journal, Facebook is preparing for a May IPO, which could raise as much as $10 billion for the company. Separately, Facebook’s impending IPO, and a broader pickup in the IPO market leave some secondary markets in a tough position.

SharesPost rival, SecondMarket, cut 10% of its employees ahead of Facebook’s IPO. But according to SharesPost founder and president Greg Brogger, in an interview with Bloomberg, his small company is set to expand:

We’ve had a significant increase in business and certainly a big part of that has been in Facebook, but we’ve also seen an increase in the transaction activity across multiple companies.

SharesPost plans to expand its headcount from less than 30 to about 50 employees by the end of this year, due in no small part to the money the company has earned from hosting the market for Facebook shares. SharesPost also hosts private marketplaces for equities in a number of other companies, including Bloom Energy, Redfin, Chegg, Kno, Truecar, Solarcity, Recyclebank, Etsy, Linden Lab, eHarmony, Eventbrite, Gilt Groupe, Kaya, Esolar, RightScale,  Powermat, Twitter and XDC, but none have attracted as much attention as Facebook.