Media Money with Julia Boorstin

As Investors Hunt for Next Facebook, SecondMarket Trading Surges

It's no surprise that investors are frustrated by the slow IPO market. So while they wait for Groupon and Zynga to start trading, they're rushing to buy a piece of companies that could be the next big thing.

Today, SecondMarket released its Q3 report: trading surged 122 percent from the year-ago quarter.

Why the surge in activity? SecondMarket CEO Barry Silbert says acceptance of the platform is growing as companies embrace this way to gain financing and allow their employees and ex-employees to cash out even without a liquidity event. (Nearly 65 percent of sellers last quarter were ex-employees).

But with Groupon and Zynga about to IPO, does that put the SecondMarket platform at risk? Silbert insists that the opposite is true — he says that the trading on the platform serves as a crucial bridge to allow companies to grow to reach an IPO.

And he says SecondMarket is serving a market that won't go away any time soon:

"The companies that are going public today, or at least trying to go public, these are the multi-multi billion dollar companies. We're never going to see the day again when a company that's worth a couple hundred million dollars can go public and so second market serves as the bridge to enable that company to grow to the point where they at least have the option of going public when the public market is open to IPOs."

So which *new* companies are drawing the most investor interest? Check out my news article on investors' search for the "next" Facebook.

Questions?  Comments?