NEW YORK, August 24, 2011 -- Facebook, Inc., widely believed to be among the fastest growing companies in the world, has recently suffered its first-ever consecutive decline in private markets. Facebook's recent drop to $33 per share in secondary market auctions has erased nearly $5 billion in the company's value, reducing Facebook's valuation to the same price it had received nearly six months ago, in March 2011.
According to research from private company financial data provider PrivCo.com, Facebook's business has recently lost momentum due to new competition from Google+ and from "Facebook Fatigue" as its user activity has peaked in key markets and begun falling. Facebook's company value is now falling as well.
"Insiders, who know better than anyone what the internal business trends are, are clearly now more willing sellers as reflected by the recent consecutive stock price drop in secondary markets", says Joseph Ranzenbach, vice president of operations at PrivCo.com.
In response to new competition and declining user activity, Facebook announced that it would be rolling out new privacy features on Thursday, August 25. Facebook's privacy changes signal that the company is finally becoming more attentive to its users, but only after years of doing otherwise and due to the new competition from Google+.
While the effects of Facebook's upcoming privacy feature changes remain unknown, the social media giant's growth may not be that of an IPO-ready firm. According to PrivCo.com CEO Sam Hamadeh, "recent buyers of Facebook stock are now holding shares at a loss. Investors would have been better off buying a treasury bill in February with a small fraction of the risk and total liquidity."
With an estimated 2.4 billion shares outstanding, Facebook, Inc.'s valuation currently stands at $79.2 billion.
For PrivCo's full Private Company Financial Report on Facebook, Inc., please see:
PrivCo Media, LLC (www.privco.com) is the premier source for business and financial data on major privately held companies. PrivCo publishes exclusive financial data on over 209,401 private companies, as well as details on over 79,558 private company deals, including private company M&A deals and multiples, venture capital investments, private equity buyouts, pre-IPO activity, restructuring, and more.