THE VALUE of Facebook hit $123bn in grey market trading yesterday, after the social networking phenomenon announced it would raise $5bn in a public offering later this year.
Financial spread betting firm IG Group, which is running a grey market in Facebook, said the website had attracted an “unprecedented” level of demand.
IG Index’s chief market strategist David Jones told City A.M.: “We had lots of buyers coming in – at one point the market cap was pushed as high as $123bn. It’s clear the view of our clients is pretty bullish.”
IG Index ran similar markets prior to the Ocado and Betfair flotations in 2010. According to Jones, the grey market valuations were “not a million miles away” from the actual market capitalisations on flotation.
At close of trading yesterday, IG’s traders priced Facebook at $112bn.
A valuation close to this price will make millionaires of many, including about a third of Facebook’s 3,200 staff, who hold company stock. Facebook Europe boss Joanna Shields, based in London, stands to make a fortune. Other London staff will also benefit.
They will be joined by graffiti artist David Choe, who accepted stock over cash when he decorated the Facebook offices in 2005. He could reap $200m.
