According to Dealbook’s Andrew Ross Sorkin, that’s how Barry Silbert, the chief executive of SecondMarket, the fast-growing private stock exchange for start-ups, views trading on the big exchanges like the New York Stock Exchange and Nasdaq.
If you don’t know SecondMarket, you should: Whenever you hear about companies like Facebook being valued at as much as $100 billion or Groupon at $15 billion — before they’ve had an initial public offering — the sky-high values are in large part being set on exchanges like SecondMarket, which allow wealthy investors to trade shares of private companies in the secondary market. Think of it as an eBay for shares of private companies.
Of course, some people might consider that a casino. But they would be wrong. Mr. Silbert’s company is trying to rewrite the rules of investing by finally creating an exchange for investors, not just traders.
And on Tuesday, Mr. Silbert is taking an unusual step: He is listing his own company’s private shares on SecondMarket.
Over the last several weeks, he secretly ran a private electronic auction on SecondMarket for a slice of the company. A handful of the most influential investors in the start-up world have taken stakes in SecondMarket, including the Facebook-backed fund, the Social + Capital Partnership; Yuri Milner, the Russian investor with stakes in Facebook, Twitter, Groupon and Zynga; and Ashton Kutcher’s investment vehicle A Grade Investments. (Yes, that Ashton Kutcher.) In total, SecondMarket raised $13 million at a valuation of $160 million.
While that may seem like small potatoes compared with NYSE Euronext — which has a valuation of $6.5 billion — the story of SecondMarket is worth considering against the backdrop of what seems like out-of-control volatility in the public stock market and an anemic market for I.P.O.’s….
Find out more at http://dealbook.nytimes.com/2011/09/26/secondmarket-an-exchange-without-the-volatility/?ref=global
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