All this year TechCrunch and others were covering the weekly SecondMarket auctions for Facebook stock. 2.7 million shares, for example, cleared in aggregate the first five auction at prices ranging from $21.01 to $28.26 per share.
The auctions have continued, but there haven’t been the dramatic price increases or decreases needed to trigger the rabid coverage. But today, for the first time I believe, SecondMarket was unable to clear any shares at all in the auction.
The weighted average offer price for this week’s auction was $33.91, roughly in line with the clearing price for last week’s auction. But the weighted average bid price was just $28.15. Zero shares cleared the market, meaning no shares changed hands.
Why? The WSJ article this week pouring cold water on rising startup valuations, and suggesting that venture cash was drying up, was almost certainly the cause. Whether or not there was much truth to the article, things like that can and do freak buyers out and cause them to step back. No one wants to buy at the top of the market.
What really matters is whether or not things pick back up next week or the week after. And whether or not sellers will take lower prices in the $20s to cash out of Facebook.