All good things must come to an end, and so it is with SecondMarket Inc.’s four-year run as the biggest private market for buyers and sellers of Facebook Inc. shares.
The initial public offering Facebook has planned for today forced an end to the private trading, which has driven the company’s valuation up more than 10-fold since 2008 to exceed $100 billion. Commissions on Facebook trading may have accounted for almost a third of SecondMarket’s revenue last year.
Meanwhile, SecondMarket grew in revenue and public recognition. Its reliance on Facebook was evident in 2011. The value of transactions in all private shares at the firm jumped 55 percent that year to $558 million, even while some of its most-traded stocks, such as LinkedIn Corp., Groupon Inc. and Zynga Inc., left for the public markets.
“The regulations have kept the business from being scalable,” said Brogger. “We are looking for a variety of ways to route investors’ capital into these companies.”