Facebook Inc. (FB:US)’s value jumped 13-fold in private trading in the four years before its initial public offering yesterday, outperforming Apple Inc. (AAPL:US) and Google Inc., based on data from SecondMarket Inc.
Trading starting in April 2008 valued the company at $8.1 billion, SecondMarket said today in a statement. That value surged to $106.8 billion as of April 5, the day that the private-stock marketplace stopped holding auctions. In the same period, Google gained 36 percent and Apple more than quadrupled.
Facebook’s IPO pricing gives the social-network website market value of $104.2 billion, making it the largest company to go public in the U.S. by market capitalization. The trading and valuation in the private market started to accelerate in late 2010 and early 2011, after SecondMarket began weekly auctions of the stock. About 86 percent of sellers were former employees, while 85 percent of buyers were institutional investors such as asset managers or hedge funds.
“The runup really started when it became much more clear that they were going to do an IPO and soon,” said Espen Robak, president of New York-based Pluris Valuation Advisors LLC, in an interview.
The $38 offering price today for 421.2 million shares gives Menlo Park, California-based Facebook a smaller market value than on April 5 in the private market. At that price, Facebook is about half the size of Mountain View, California-based Google. The world’s largest search engine has a market capitalization of more than $200 billion.
“The IPO price is definitely a low number compared to what everyone has been playing with in the private market,” Robak said.
Investors in the private market were able to capture returns before the company went public, said Boyd Steinhoff, vice president at SecondMarket in New York.
“What this private market has become in the last years is really a reinvention of what the IPO market used to be for small-cap companies,” Steinhoff said.
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