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:
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
This article provokes your thoughts on the applicability of stock market advice, products and services as it relates to your stock market trading (success).
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.
This article covers two approaches to dealing with candlestick technical analysis. The trader can learn the candlestick patterns, the situations in which they translate into trend reversals, and apply the analysis to trading decisions. Or the trader can use the assistance of software.
This article covers my trading observations and evaluation in the month of March/2009. Different trading ideas are examined.
This article covers my day trading experiences in the month of March/2009. Different trading timeframes are compared.