The value of Facebook may have reached an all time high of $50 billion, based on a private market transaction disclosed to TechCrunch Co-Editor and Founder Michael Arrington.
Arrington wrote that a transaction on SecondMarket last week moved roughly $40 million of Facebook holdings, at a price of $20.76 per share, for about 1.9 million shares.
Assuming that 2.5 billion shares are outstanding, including the fruit of a five-to-one stock split this year, the most recent transaction described by Arrington means Facebook has a $50 billion value.
This makes Facebook worth about two-thirds of Amazon. The $50 billion also amounts to about one-quarter of Google.
All of this is hypothetical, however, because Facebook remains privately held. We have received confirmation that a transaction occurred, but a spokesperson declined to elaborate on any of the numbers.
“We successfully completed our initial Facebook auction last week but I cannot comment on the size, price or participants in the transaction,” said Mark Murphy, head of public affairs for SecondMarket, in an email.
If the shares were publicly held, perhaps this might be the time when pundits might question whether the company’s value is going up too quickly. Words like “frothy” or “bubble” might enter the discourse. But when you can’t even verify the share price, it’s really premature to throw out cliches like “what goes up, must come down.”
Arrington suggests that a new auction for Facebook shares may have already started. Here’s a copy of the email message that TechCrunch’s founder claims was circulated to participants in the SecondMarket transaction of last week:
To All Facebook Market Participants:
Thank you for your feedback and participation in last week’s Facebook auction. As we had hoped, there was robust seller and buyer participation – the auction fully cleared at a per share price of $20.76. In addition, there was overwhelmingly positive feedback on the auction process. As a result, we will be continuing to conduct these auctions for the foreseeable future. For this week, the process will remain reasonably similar, with slight tweaks to the timeline. The reserve price for this week will be $20.60, the same as last week.
If you own shares that you are eligible to sell and wish to participate as a seller, please complete the attached Seller Information Sheet and submit it to SecondMarket at firstname.lastname@example.org by tonight, Monday, November 29th, at midnight EST.
If you would like to participate as a buyer, please complete the attached Buyer Information Sheet and submit it to SecondMarket at email@example.com by Wednesday, December 1st at 12:00 PM EST.
Please see below for more detailed results on last week’s auction and for this week’s auction calendar:
11/22-11/26 Auction Results:
Total Number of Shares Offered for Sale: 1,896,265
Number of Shares Cleared in Auction: 1,896,265
Reserve Price: $20.60
Clearing Price: $20.76
11/29-12/3 Auction Timeline:
· Monday, November 29th at 10:00 AM EST – Auction process commences
· Monday, November 29th at 11:59 PM EST – Seller order forms due
· Tuesday, November 30th at 9:00 AM EST – Buyers informed of share quantity available
· Wednesday, December 1st at 12:00 PM EST – Buyer order forms due
· Wednesday, December 1st at 5:00 PM EST – Participants informed of auction results
· Wednesday, December 1st at 8:00 PM EST – Transaction documentation distributed to buyers and sellers
· Friday, December 3rd at 4:00 PM EST – Completed transaction documentation due from buyers and sellers
· Friday, December 3rd at 7:00 PM EST – Notice to be sent to Facebook, Inc.
Readers, what do you think of this latest valuation, and how might the shares price in the next auction?