Facebook's Private Market Value Has Fallen 8% Since July

3:36 PM PDT 10/5/2011 by Georg Szalai

Comments

But the social network is still worth around $77 billion and is expected to have one of the largest U.S. initial public offerings ever next year.

NEW YORK - After an extended run-up, Facebook’s private market value has declined as of late amid economic concerns that have dragged down stock markets, the Wall Street Journal reported Wednesday.

Shares in the privately held social network, led by CEO Mark Zuckerberg, are offered to wealthy investors and institutions on secondary marketplaces where former employees can sell them.

Over the course of the first quarter of the year, Facebook’s private market share price rose 70 percent to $34 before hitting around $35, the Journal said, citing data from trading platform SharesPost. However, Facebook's price has fallen 8 percent since July to $32.10 in an auction held last week, valuing the entire company at around $77 billion, according to the paper.

Facebook is still expected to go public next year in what the Journal said is seen as one of the largest U.S. initial public offerings ever. where can purchase shares offered mostly by former employees.

Jim Friedland, Internet analyst at Cowen & Co., told the Journal that Facebook and Google are open to being affected by a potential slowdown in advertising in case of a renewed recession. But he and other analysts say there has been little sign of a slowdown in Facebook's longer-term growth trajectory, the Journal said.

Still, some have lowered their projections for Facebook's 2011 advertising revenue. Research firm eMarketer has cut its estimate by 6.1 percent from the start of the year to $3.8 billion, the paper said.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai