Facebook’s ‘value’ soars as investors seek pre-IPO stake

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Facebook is now worth as much as $33.7bn based on secondary market transactions, giving the privately held company an implied valuation greater than the market capitalisations of publicly traded internet stalwarts such as Ebay and Yahoo.

Common stock in Facebook is trading as high as $76 a share as investors scramble to get a piece of the company before it files for an initial public offering, which analysts say could be the biggest technology IPO since Google’s $1.67bn flotation in 2004.

Facebook’s ballooning valuation compared with listed groups such as Ebay and Yahoo, which have market caps of $30.1bn and $18.3bn respectively, signals a new dynamic between technology companies and investors.

While Facebook and other successful Silicon Valley companies, such as Twitter, LinkedIn and Zynga, are delaying their IPOs because of perceived weak appetite on the public markets, some investors are not content to wait. They are acquiring stakes in technology companies while they are still private, hoping that their eventual IPOs will send share prices even higher.

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