SharesPost and SecondMarket Inc. are among the exchanges that match early investors, founders and employees wishing to sell shares that are not yet listed on regulated exchanges with buyers who want access to shares in a company that has not yet held an initial public offering. SharesPost, for example, traded pre-IPO shares of Facebook Inc. (NASDAQ: FB) and currently includes trading in Spotify and Violin Memory.
The Nasdaq Private Market (NPM), as the new joint venture is to be called, is intended to provide liquidity to investors and employees of privately funded companies that are now staying private longer before holding an IPO. The new marketplace is expected to launch later this year. pending regulatory approvals.
Those approvals might be a bit tricky to come by. About a year ago, Bloomberg reported that the SEC was looking into the trading practices of SharesPost and another firm, Felix Investments Inc. No action appears to have been taken, but now that pre-IPO market is going mainstream, regulatory scrutiny is likely to be more intense.
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