Stock Trading in Private Companies

There are a number of social media networking companies that are enjoying tremendous success as private companies i.e. they are not listed on the public stock exchanges. With the success of companies such as Facebook, Twitter, Zynga and LinkedIn, a secondary trading market has developed to engage in the trading of shares of these privately-held companies.

In the past year (2010), several private exchanges have emerged to match up the buying and selling of private shares in these fast-growing companies which have enjoyed hundreds of millions of dollars of revenue. The trading volume has been relatively low but the number of share trading transactions is increasing each month. Wall Street brokerage firms have formed investment pools to buy up shares.

The shares come mainly from former employees at the companies and from venture capital investors who want to take an early exit to capitalize on their stake in the company. Buyers of these shares include wealthy speculators looking for a piece of the action in the next big thing. This buying activity relating to Facebook is mentioned in the Google, Yahoo, Facebook Revenue article.

As these companies take longer to tap the public markets by delaying their IPO (Initial Public Offering), pent up demand is created. This demand has fueled the creation of these secondary market exchanges to engage in trading of shares in these private companies. Examples of these exchanges include:

  • SharesPost
  • SecondMarket

Facebook valuation is $42.4 billion and for Twitter valuation is $3.6 billion as implied by the pricing on the private company share exchanges.

More you might like

Stock Market Day Trading Experiences

This article covers day trading experiences examining what works and what doesn’t work. Many similarities exist between day-trading and short-term inter-day trading.

Paper Trading Preparation for Real Trading

This article covers the topic of paper trading as preparation for trading with real money. Failure in paper trading is a sign that the person should not partake in real trading. Success in paper trading does not necessarily mean a person will succeed in real trading.

Impact of Personality Influences on Stock Trading

This article examines the impact of personality influences on stock trading activities and what can be done to control such influences on stock trading.

Ranting on Stock Market Day Trading (March/2009)

This article covers my ranting on stock market day trading in the month of March/2009. Main lessons learned are listed to be remembered.

A Trend Following Method to Guide Your Stock Trading Buy/Sell Decisions

This article examines the elements of successful stock trading. A stock trading method to execute winning trades and to achieve trading success. A trend following system based on candlestick technical analysis.

Covid-19

Visit igtsoft.com for
your photography needs.

Terrafugia flying car cockpit



Canada is the world's second largest country in the world by area and ranks 28th in population.