Facebook investors soar ahead of IPO

Facebook is already trading like a public company as insiders and wealthy investors use private marketplaces to buy and sell stock in the social networking company, ahead of its initial offering.

The shareholder base has grown to more than 1,000, compared with the 50 to 100 investors most companies have when they go public, according to an estimate by Sam Hamadeh, head of research firm PrivCo. Private purchases pushed Facebook’s valuation past $100 billion (€75bn), possibly limiting immediate gains for IPO investors, given that Facebook may seek a $75bn (€55bn) to $100bn value.

“Facebook is a blue-chip stock and it’s not even public yet,” said Kevin Landis, portfolio manager for the Firsthand Technology Value Fund in San Jose, California. Facebook jumped as high as $44 this month in private trading, valuing the company at $103bn, leaving it higher than when Landis bought stock at $30 to $31 in October. He said he aims to add to his holdings.