Fever Breaks for Facebook Shares
The once-dizzying rise in the value of privately owned Facebook Inc. has slowed, a sign the social network hasn't been immune to broader market volatility or the weakness in the global economy.</br></br>Despite the cooling, Facebook next year still is expected to make one of the largest U.S. initial public offerings ever. For now, its stock is traded on secondary marketplaces where wealthy investors and institutions can purchase shares offered mostly by former employees.</br></br>Facebook share prices surged 70% to $34 in March from December, as reported in auctions by SharesPost Inc., a trading platform for stocks of privately owned companies. The growth since has leveled off, with shares trading at $35 or below. Facebook's price has fallen 8% since July, to $32.10 in a SharesPost auction held last week, valuing the entire company at roughly $77 billion.</br></br>Facebook isn't alone, or even the worst hit of its bretheren. Hot technology companies that have gone public in recent years also took hits in the market-wide downturn. The Standard & Poor's 500-stock index has dropped 16% from its April peak, during which time the Nasdaq Stock Market Internet index has slid 21%.</br></br>Investors and analysts say the price of Facebook's stock, owned mostly by employees and outside investors, can't easily be pinned down because trades take place in a variety of venues, some of which don't disclose the prices. Also, valuations based on just a few buyers and sellers might not reflect how a company would be valued if millions of its shares were traded publicly.