[credit provider=”Jim Migdal” url=”http://www.facebook.com/photo.php?fbid=10150538757885012&set=t.728966219&type=1&theatre”]
Update and Correction: Sharespost CEO David Weir says the latest Facebook auction was indeed “oversubscribed.”Sharespost has just amended the way it describes its auctions.
“There was more than enough demand to fill the shares available, and all of the stock was sold at a price ($31.50) that was higher than the offered reserve price ($30.00) – meaning the auction was oversubscribed. Also note that this auction was much larger than the previous Facebook ones at 150,000 shares offered versus 100,000 in the previous two auctions. However, SharesPost removed the term ‘significantly oversubscribed’ from their usual email notification because during an editorial review of all communications they felt that this term was too subjective. In the interest of simplifying communications, they will be using this new wording moving forward, and may simplify it even more.”
Earlier: Facebook’s soaring valuation might finally be getting too rich for the wealthy individuals dabbling in the secondary markets.
At the very least, supply of Facebook stock from ex-employees and early investors is finally beginning to catch up with demand.
- In December, Sharespost held an auction for Facebook shares. Afterward, Sharespost announced (emphasis ours): “The response from the SharesPost community to the auction was substantial and the auction was significantly oversubscribed”
- In January, there was another auction. Again, Sharespost announced: “The response from the SharesPost community to the auction was substantial and the auction was significantly oversubscribed.”
- Finally, on May 11, Sharespost held another auction. But this time, their announcement was a tad more muted: “The response of the SharesPost community to the auction was substantial.” It seems the auction was not “oversubscribed.”
In April, Reuters reported that a number of Facebook insiders, including early employees and investors, tried to sell as much as $1 billion worth of stock at a $70 billion valuation – and didn’t find enough takers.
“At the current valuation where it is, it is really hard to justify the investment,” Sumeet Jain, partner at venture capital firm CMEA Capital, told Reuters. His firm looked but said no. “It’s hard to imagine it will turn into a $270 billion company in the next few years.”
“It’s priced to perfection in the private marketplace,” another investor pitched on the deal told Reuters. “I don’t like to own anything I can’t sell right now.”
A source briefed on Facebook’s financials tells us the company could see $2 billion EBITDA this year on $4 billion in revenue. Those revenues numbers are good, but they aren’t where Google’s were after it first six years: