FORTUNE -- The NASDAQ OMX Group this morning announced that it has formed a joint venture with SharesPost, in order to "establish the preeminent marketplace for private growth companies."
Neither side is disclosing financial details, except that NASDAQ (NDAQ) will be majority shareholder. SharesPost founder and CEO Greg Brogger will serve as president, with the platform to launch sometime later in 2013 (pending regulatory approvals).
In short, this is a major vote of confidence for private trading markets -- and one that should help bring new participants to the table (both traders and issuers). It also is a much-needed reputational boost for SharesPost, which last May was charged by the SEC with engaging in securities transactions without first registering for the required broker-dealer license (the two sides later settled for $100,000).
Today's announcement, however, was more of a marketing exercise than an actual explanation of the new platform. Here are some questions that we don't yet know the answers to:
1. How will the joint venture make money? I'd assume that there will be commissions charged to traders, but will companies also be required to pay listing fees? Moreover, what types of services (data, advisory, etc.) might the platform offer that aren't currently offered by SharesPost? Does it plan to conduct primary capital raises and, if so, how much will it charge? Also would be interested to know if NASDAQ expects this platform to become a significant revenue generator, or if it's primarily a way for the exchange to ingratiate itself with future clients of its public market business.
2. How much automation? Right now, the market for private shares is largely a relationship business that involves a lot of human touch. Is NASDAQ seeking to change that and, if so, by how much? For example, could we end up seeing high-frequency trading of Pinterest shares?
3. How much info? NASDAQ is promising that the new market will be "transparent," but doesn't explain what that means. I'd assume that trading prices and volumes won't be available on Nasdaq.com, for example -- after all, this will be a closed private market -- but is NASDAQ saying that traders will get more underlying company information than currently do on private secondary markets?
4. Why SharesPost? NASDAQ seems to have chosen the private market's number two player in SharesPost, without exploring a similar deal with top dog SecondMarket. It says the decision was based on an affinity for SharesPost's technology platform, but there also are whispers from multiple folks that financial considerations also played a role. In short, SecondMarket would have driven a harder bargain.
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Facebook is now public. How did the private traders do?
FORTUNE -- Facebook (FB) is largely credited with the widespread popularity of trading in private company shares, and arguably has seen more of its stock trade via secondary markets than all other private companies combined.
The question, therefore, is whether those pre-IPO buyers got a good deal.
According to data released this morning by SecondMarket, it would seem they did. At least most MOREDan Primack - May 18, 2012 9:26 AM ET
With Facebook going public, the private secondary markets move on.
With the secondary private markets about to lose their cash cow, I was curious as to what companies might be able to (partially) fill the void. So I rang up SecondMarket, which last Friday laid off around 10% of its 150-person workforce in preparation of the Facebook IPO. The exchange wouldn't divulge trading data on private companies, but did provide a MOREDan Primack - Apr 3, 2012 9:26 AM ET
The private markets could get yet another black eye.
Bloomberg reported yesterday the the SEC is expected to file charges against SharesPost and Felix Investments, for activities related to trades of shares in private companies like Facebook. Fortune has learned that the SEC also is interested in a third firm, EB Exchange Funds, and that it may already have reached a settlement.
Each case seems to be a bit different. SharesPost reportedly MOREDan Primack - Mar 13, 2012 3:44 PM ET
Facebook shares are still trading on secondary markets, despite suggestions to the contrary.
There is lots of talk this morning that Facebook's IPO filing is imminent, based on a Bloomberg report that Facebook's legal reps at Fenwick & West instituted a three-day "halt" on processing secondary trades of Facebook shares. The story says:
"While buy and sell orders can be made, transactions won't be processed by Facebook's attorneys at Fenwick & West LLC from MOREDan Primack - Jan 25, 2012 10:13 AM ET
Must private companies tell us the truth?
Barry Ritholtz today asked if Facebook has missed its IPO window, under a theory that almost all companies have an expiration date. He quickly concludes that there will still be plenty of public demand, although the strong launch of Google+ may have "shaved some billions off the IPO price."
Near the end of his post, Ritholtz suggests that private companies like Facebook are allowed to MOREDan Primack - Jul 15, 2011 2:51 PM ET
The man who bought Facebook shares at a valuation of only $70 billion explains how he did it.
GSV Capital (GSVC), a publicly-traded investment firm focused on private companies, today disclosed that it has acquired 225,000 Facebook shares at $29.28 per share. This works out to a valuation of approximately $70 billion, which is less than where Facebook shares have been trading lately on the private secondary markets. Not surprisingly, GSV MOREDan Primack - Jun 27, 2011 3:12 PM ET
The earliest investor in LivingSocial has already cashed in, but hasn't yet cashed out.
The secondary trade has arrived at daily deals site LivingSocial. Grotech Ventures, a Virginia-based VC firm that led the company's $5 million Series A round in July 2008, recently raised around $200 million by selling shares to undisclosed third-party buyers.
peHUB first reported the news, which Fortune has since confirmed. Two minor differences in our reporting, however:
1. peHUB MOREDan Primack - Jun 27, 2011 12:06 PM ET
Earlier today, Fortune reported that Rep. David Schweikert (R-AZ) will introduce legislation that would give private companies much more flexibility over their own future. Specifically, it would effectively eliminate SEC regulations that can compel private companies to go public, once they have distributed shares to a certain number of people.
The bi-partisan bill is expected to be formally filed later this afternoon, with co-sponsors including Reps. Jim Himes (D-CT), Mike Quigley (D-IL), MOREDan Primack - Jun 14, 2011 12:04 PM ET
Private companies may be allowed to stay private longer.
Congress may soon change the law that is compelling Facebook to go public in early 2012, Fortune has learned.
Reps. David Schweikert (R-AZ) and Jim Himes (D-CT) are among those who plan to introduce a bill that would amend the Securities Exchange Act of 1934. According to a draft copy, it would:
1. Expand the so-called "500 shareholder rule" to 1,000 shareholders. This rule currently MOREDan Primack - Jun 14, 2011 6:26 AM ET
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