The bidding ended at $26.25 per share, on a sale of 670,000 shares, for a total of roughly $17.5 million, according to TechCrunch. That amounts to a seven percent decline from the previous sale, giving the social network an implied valuation of about $65.5 billion. This might be the first ever drop in the value of Facebook’s stock, but we can’t say that with any certainty given the limited information we have about the privately-held stock.
The last private auction closed at $28.26 a share, for a total valuation of $70 billion. That number reflected the buzz over the Goldman Sachs-led investment in Facebook, which had valued the social network at $50 billion.
The seven percent drop in the implied value of the company coincides with when Facebook put out an official press release indicating that the total value of the investment led by Goldman Sachs amounted to $500 million less — that’s 25 percent — than what the media had previously reported.
A drop of just seven percent in SecondMarket trading seems modest compared to that 25 percent reduction in the known value of the Goldman-led investment. The latest dip also seems small compared to the size of the gain that resulted from the previous auction that had closed at an implied value of $70 billion for Facebook. And the current valuation of $65.5 billion is still a lot higher than the $50 billion that Goldman Sachs had effectively valued the social network at.
TechCrunch‘s co-founder Michael Arrington first reported the results of the latest auction and posted a copy of the email that went out to both auction participants and those eligible to participate — we can only assume he’s part of the latter, but appreciate his sharing the message we’ve reproduced below:
To Facebook market participants:
Thank you to those who participated in this week’s SecondMarket auction for Facebook shares. The auction was successful and partially cleared (94.6%) at a per share price of $26.25. Next week, the floor price will be $24.96 and we will require a minimum sale of 25,000 shares.
If you own shares that you are eligible to sell and wish to participate as a seller, please complete the attached Seller Information Form and submit it to SecondMarket at fb@SecondMarket.com by Monday, January 31 at 7:00 PM EST. To verify receipt of your sell order, you must receive a confirmation email from fb@SecondMarket.com. If you do not receive a confirmation email, your sell order has not been received by SecondMarket and may be excluded from the auction.
Please see below for detailed results on previous auctions and for next week’s auction timeline.
Previous Auction Results:
Total Shares Cleared to Date: 3,391,265 over six auctions
Clearing Price in Most Recent Auctions:
January 24, 2011: $26.25
January 12, 2011: $28.26
December 15, 2010: $22.75
December 8, 2010: $21.90Next Week’s Adjusted Auction Timeline:
- Monday, January 31 at 7:00 PM EST – Seller Information Forms due
- Monday, January 31 at 8:00 PM EST – Buyers informed of share quantity available and minimum purchase amount
- Wednesday, February 2 at 12:00 PM EST – Buyer Information Forms due
- Wednesday, February 2 at 5:00 PM EST – Participants informed of auction results
- Wednesday, February 2 at 8:00 PM EST – Transaction documentation distributed to buyers and sellers
- Friday, February 4 at 4:00 PM EST – Completed transaction documentation due from buyers and sellers
- Friday, February 4 at 7:00 PM EST – Notice sent to Facebook, Inc.By reading this email, the recipient acknowledges and agrees that all of the information contained herein is confidential and that the recipient will keep this information confidential. The recipient further agrees that it will not copy, reproduce, or distribute this email in whole or in part.
Please contact us at fb@SecondMarket.com or 212.668.3919 if you have any questions.
Please note that the information in this email does not constitute an offer to sell to, nor a solicitation of an offer to buy from, nor shall any securities be offered or sold to, any person in any jurisdiction in which such an offer, solicitation or sale would be unlawful.
The next auction should prove interesting because stock-pickers may regard the seven percent drop in value as the beginning of a correction. Any downward pressure might pick up some momentum from a survey announced today by Bloomberg News revealing that 69 percent of investors think Facebook was already overvalued at $50 billion.
What direction do you think that Facebook shares will go in the next private market auction? Do you believe the latest dip represents the beginning of a correction in the stock price or something more fleeting?
Source: All Facebook
Thursday, January 27, 2011