Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Risk

12/28/2010
12:13 PM
50%
50%

Facebook Value Leaps 56% To $41.2 Billion

The social media giant led strong gains among privately held social media companies, including Groupon, Zynga, and Twitter, in the second half of 2010, finds analyst study.

Flock Browses All Your Social Connections
(click image for larger view)
Slideshow: Flock Browses All Your Social Connections
Privately held social media firms are gaining in value, with rock star Facebook now worth more than better-established publicly held businesses such as eBay and Yahoo, a report shows.

In the past six months, Facebook's value grew 56% to $41.2 billion, according to securities firm Nyppex. The value of 11 privately held Internet social networking businesses increased by a total of $20 billion -- or 54% -- between June 30 and December 1, the firm determined. Groupon, Zynga, and Twitter all are valued at more than $2 billion, Nyppex said.

At $41.2 billion, Facebook is worth more than giants across many industries, including Viacom, CBS, and Time Warner, said Laurence Allen, managing member at Nyppex. The securities firm valued eBay at $32.8 billion and Yahoo at $18.4 billion. Google -- valued at $149 billion -- and Amazon -- at $73.5 billion -- still lead the pack. Zynga and LinkedIn's values dropped slightly, Nyppex said.

"We try to be students of venture history, and we think this is a milestone event that's taken place in the last six months," Allen told Digital Trends.

The companies in the study are privately held, with no immediate plans to file initial public offerings (IPOs). Nyppex generated the research for those interested in acquiring a piece of Internet startups, typically buying stock from existing shareholders, such as employees, in deals called secondary transactions. The volume for secondary-transaction deals could hit $4.9 billion this year, as companies delay IPOs, but investors pursue partial ownership of startups, Allen told Bloomberg.

"This trend will create even more pressure on portfolio managers to evaluate how to participate in growing private companies," he told the news organization. "We get new buy orders weekly from institutions trying to buy secondary shares in private social-media companies for the first time."

Driven, perhaps, by this increased volume, the Securities and Exchange Commission is scrutinizing trading in private companies, the New York Times reported on Monday. The agency has, in fact, sent information requests to a number of participants in the buying and selling of stocks at Facebook, Twitter, Zynga, and LinkedIn, the Times said, citing two people with direct knowledge of the inquiry.

Although details of the inquiry are limited, several securities lawyers said the action could be related to determining the number of shareholders at these social media companies, the Times said. As long as the businesses have fewer than 500 shareholders, they do not have to disclose financial results to the public. As soon as a company has 500 or more shareholders, SEC rules dictate a company must publicly share its financial results.

In March, Facebook stopped allowing current employees to sell stock. Now only former workers can offer their stock for sale. The company also put into effect an "insider trading" policy, and gives newly hired Facebook employees restricted stock that only have value if the company goes public, according to the Times.

Comment  | 
Print  | 
More Insights
Comments
Oldest First  |  Newest First  |  Threaded View
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Write a Caption, Win a Starbucks Card! Click Here
Latest Comment: Our Endpoint Protection system is a little outdated... 
Current Issue
The Year in Security: 2019
This Tech Digest provides a wrap up and overview of the year's top cybersecurity news stories. It was a year of new twists on old threats, with fears of another WannaCry-type worm and of a possible botnet army of Wi-Fi routers. But 2019 also underscored the risk of firmware and trusted security tools harboring dangerous holes that cybercriminals and nation-state hackers could readily abuse. Read more.
Flash Poll
Rethinking Enterprise Data Defense
Rethinking Enterprise Data Defense
Frustrated with recurring intrusions and breaches, cybersecurity professionals are questioning some of the industrys conventional wisdom. Heres a look at what theyre thinking about.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2019-19740
PUBLISHED: 2019-12-12
Octeth Oempro 4.7 allows SQL injection. The parameter CampaignID in Campaign.Get is vulnerable.
CVE-2019-19746
PUBLISHED: 2019-12-12
make_arrow in arrow.c in Xfig fig2dev 3.2.7b allows a segmentation fault and out-of-bounds write because of an integer overflow via a large arrow type.
CVE-2019-19748
PUBLISHED: 2019-12-12
The Work Time Calendar app before 4.7.1 for Jira allows XSS.
CVE-2017-18640
PUBLISHED: 2019-12-12
The Alias feature in SnakeYAML 1.18 allows entity expansion during a load operation, a related issue to CVE-2003-1564.
CVE-2019-19726
PUBLISHED: 2019-12-12
OpenBSD through 6.6 allows local users to escalate to root because a check for LD_LIBRARY_PATH in setuid programs can be defeated by setting a very small RLIMIT_DATA resource limit. When executing chpass or passwd (which are setuid root), _dl_setup_env in ld.so tries to strip LD_LIBRARY_PATH from th...