This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

How to Crash Investors' Private Parties

T. Rowe Price (TROW - Get Report) has sprinkled private shares into several funds. In April, it went public with its $190 million investment in Facebook, shares bought via a private offering of employee-owned stock that was authorized by the social media giant.

The T. Rowe Price Global Technology Fund (PRGTX) and its Science and Technology Fund (PRSCX) may be top-heavy with well-known, public companies such as Apple (AAPL - Get Report), Microsoft (MSFT - Get Report), Google (GOOG - Get Report) and H-P (HPQ - Get Report), but also under the hood are hot pre-IPO companies including Facebook, Angie's List, Zynga, Twitter and Groupon. Be aware, however, that the T. Rowe Price funds still only have less than 1% of their holdings in Facebook, so Mark Zuckerberg isn't going to get to know you on a first-name basis.

Taking a cue from T. Rowe Price, one approach to buying private stock is to find a willing (and authorized) seller.

Even those with enough personal wealth to not worry about SEC restrictions can find it hard to crack into the exclusive club of private shares. As such, a variety of exchanges have emerged -- SharesPost and SecondMarket among them -- to match up buyers with sellers (which often include early VC investors and past or present employees with stock options).

As of July 26, SecondMarket had completed $268 million in private company stock transactions. Since its start in 2008, it has completed 650 transactions for about $750 million.

Far and away, for Q2 of 2011, the hot industry has been consumer Web and social media, for 87.6% of SecondMarket's completed transactions. Retailing and commerce accounted for 5.1% and "business products and services" commanded 7.3% of transactions.

What's hot? According to the company, the most-watched companies on its site are Facebook, Twitter, Groupon, Zynga, Foursquare, Yelp, Dropbox, Gilt Group and LivingSocial.

There is a possibility it will soon be easier for individuals to buy private shares.

In an April 6 letter to U.S. Rep. Darrell Issa, R-Calif., chairman of the Committee on Oversight and Government Reform, SEC Chairman Mary Schapiro responded to his concerns that regulations were stifling investment and, in turn, stalling IPOs.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $110.78 0.36%
GS $180.70 2.08%
GOOG $638.06 1.80%
HPQ $27.18 4.26%
LNKD $194.65 2.88%


Chart of I:DJI
DOW 16,776.43 +304.06 1.85%
S&P 500 1,987.05 +35.69 1.83%
NASDAQ 4,781.2640 +73.4890 1.56%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs