You've probably heard about all the crazy behind-the-scenes deals going on as investors buy and sell stock in sites like Facebook and Twitter. This system has traditionally been unregulated as it is taking place outside of the publicly traded markets. According to New York Magazine, it is looking like the SEC is about to get involved in order to investigate how these shares are being traded.
It's quite a feat for a company that isn't even publicly traded yet, but Business Week is reporting that Facebook is now being valued higher than the faltering eBay. Based on the privately traded share price of $16, Facebook's total valuation is about $41 billion. eBay is only valued at $39.3 billion; although, those are real shares. The two companies Facebook is trailing are, of course, Amazon and Google. These two behemoths are valued at $74.4 billion, and $192.9 billion respectively.
Facebook's value is all tied up in the huge number of users it has. As far as we know, the company is making money, but as it is not publicly traded yet, we don't get the details. Facebook has been leveraging the notion that their eventual IPO will shoot their valuation into the stratosphere to pilfer employees from other tech companies. They often do this by offering juicy stock options.
Do you think that when Facebook goes public, it will end up valued higher than Amazon, or even *gasp* Google. 500 million friends may be a lot, but those people might not be worth 192 billion to investors.
Standard & Poor (S&P) on Wednesday warned it may end up cutting Sprint's credit rating because of "weak" performance this year, news of which made some investors skittish enough to dump the wireless provider's stock. Shares fell 9 cents, or 2.8 percent, in midday trading, Businessweek reports.
"We remain concerned that the company may have difficulty in improving operating trends as industry conditions mature and competition intensifies," S&P analyst Allyn Arden said in a statement.
Sprint, which ranks as the the third-largest wireless carrier in the U.S., has been losing customers and piling up debt as of late. Arden said even if post-paid subscriber losses level out and Sprint continues to adjust its cost structure, earnings may still not grow enough to materially improve credit measures, at least not any time soon.