Monday, March 7, 2011

Private Trading Raises Twitter Valuation to $7.7 Billion

I avoid stocks, where so much is based on the future and the valuations are already in the billions, but clearly others think otherwise.

The latest auction of Twitter shares on Sharespost valued the company at $7.7 billion, which is almost twice as high as Twitter’s valuation after a round of funding in January, reports Mashable.

According to Sharespost, a secondary market that lets investors trade with otherwise illiquid assets, investors have agreed to buy 35,000 shares of Twitter’s Series B preferred stock at $34.50 per share.

Says Mashable, Facebook has experienced a similar growth on secondary markets in the past two years: after being valued at a mere $9.5 billion in November 2009, a round of funding in January this year valued it at $50 billion, with the latest trades with the company’s shares pushing the number even higher, to $65 billion.
The Fed pumping in the 4th quarter most certainly helped with these spikes, but it is not clear where Fed money supply growth goes from here, given so much money is staying out of the system as excess reserves. Speculators beware.

1 comment:

  1. Wait are you saying that you avoid stocks in general? That's what it reads with the punctuation...or did you make a punctuation mistake, and meant to say basically that you just avoid stock where they are valued in the billions?