SecondMarket gave CNBC a first look at its 2011 trading results of private company shares and social media continues to be hotter than ever.
With Congress evaluating revising the “500 shareholder rule,”to enable companies to stay private longer, more investors are jumping into this platform for tapping into private company value. SecondMarket is big business, with $585 million in trades last year, up 55% from $360 million in 2010 and just $100 million in 2009. And this business was curtailed by limited shares – there was $6.1 billion in buy-side demand last year.
There’s no question that expectations that Facebook is preparing to file its S-1 is driving investor interest in the space—sixty percent of trades were for consumer web and social media companies. SecondMarket won’t disclose exact trades, but it reveals which companies investors are interested in, or “watching.” Usual suspects Facebook, Twitter and Foursquare top the “most watched list.” They’re followed by cloud storage company Dropbox, Yelp, Gilt Group, Hulu, and mobile payments company Square. The top ten is rounded out by Groupon rival Living Social, which is backed by Amazon and music service Spotify.