Be the first to like this
This is a 2010 article describing / predicting the effect of secondary markets on private company stock valuations.
With the attractiveness and increasing popularity of marketplaces for pre-IPO stock, there is growing debate over how transactions in private company stock impact the value of company securities for 409A purposes. At the core of these discussions is the question of whether a transaction occurring in a private marketplace is a strong indication of value. In this article we offer guidelines for valuation professionals and company executives to consider when assessing the impact of such secondary transactions on the fair market value of private company stock.