New York: Robert Morley owns one of the hottest commodities in Silicon Valley — shares of Facebook Inc — but his big worry has been how to unload the stock.

Morley got the shares as part of his pay when he was controller of the social-networking giant in 2007 and 2008.

The likely value of the stock promptly ballooned as the internet company's popularity and business prospects surged. Soon the stake accounted for an uncomfortably high percentage of Morley's personal wealth, and he was not the only Facebook shareholder in that predicament. "There are a whole bunch of early employees who have big bunches of shares, and I'm sure a lot of them want to get rid of them," said Morley, now a consultant to tech start-ups.

But Facebook is privately held, meaning its shares don't trade on an exchange, so there was no easy way for Morley to cash out.

Then he learned about SecondMarket, a start-up that matches buyers and sellers of shares of private firms. Since late last year he has used SecondMarket to sell three chunks of his Facebook stock at lofty prices. (Morley declined to say how much he sold or still owned.)

Slowdown

SecondMarket and a smaller rival, SharesPost, have emerged as virtual Big Boards for the tech and financial elite who create and grow young companies in Silicon Valley and elsewhere.

The development stems from a slowdown in recent years in the conventional path to an initial public offering. One reason fast-growing new firms have been slow to go public is that until recently many of them have not had a choice.

The IPO market was practically dead in 2008 and 2009 as investors scrambled to avoid risk during the financial crisis and deep recession.

"They are filling a real need in the market," said David Weild IV, founder of Capital Markets Advisory Partners, which advises companies on IPOs. Since launching its private-share market about two years ago, SecondMarket, with offices in New York and Palo Alto, has brokered $500 million (Dh1.83 billion) of trades, with the volume doubling last year from the year before.

The company's market differs from real exchanges because trades typically require the participation of the firm's team of brokers, who hold the hands of both buyers and sellers.

The average transaction size is about $2 million. SecondMarket takes a commission of 3 per cent to 5 per cent. The brokers, who number about 10, sit together in the company's Wall Street office.

Immense growth

SecondMark handles trades of shares in about 40 companies, said Adam Oliveri, the 28-year-old head of the firm's private-share market. But he predicts that number will rise quickly to 500 companies, with each stock traded on a more regular basis.

"There's immense growth ahead," Oliveri said. SharesPost, based in San Bruno, California, was founded in 2009 in Santa Monica and quickly outgrew that space and moved most of its staff closer to Silicon Valley. Aiming to look more like a traditional stock exchange, SharesPost lists bids to buy and sell shares of about 150 private companies on its membership-only website.

Facebook may let staff offload equity

Facebook may let its employees sell up to $1 billion (Dh3.67 billion) of their shares to institutional investors at a price that values the company at about $60 billion, an influential industry blog reported.

Facebook is pondering the move after entertaining approaches from a number of major institutions interested in investing in the world's largest social network, the All Things Digital technology blog cited sources as saying on Thursday.

That valuation would surpass previous measures. Last month, the company founded by Mark Zuckerberg in a Harvard dorm room raised $1.5 billion of financing in a round led by Goldman Sachs, which valued it at $50 billion.

Facebook, whose online service counts more than a half a billion users worldwide, is expected to possibly go public around 2012.

Blog: A Facebook spokesman declined to comment.

Investors have been eager to buy shares of Facebook before then and have gone to private exchanges, where shareholders like venture capitalists and former employees have put some of their stock up for sale.

Facebook tightly restricts current employees from selling their shares on private exchanges, making it difficult for them to cash in on the company's success.

In 2009, Facebook arranged for Russian investment firm Digital Sky Technologies to purchase at least $100 million of common shares from its employees. DST was also part of the deal led by Goldman Sachs in January.

Last year, Facebook overtook Google Inc to become the most visited website in the United States, according to online analytics firm Experian Hitwise.

The company is generating profits at a faster-than-expected rate, according to a document distributed by Goldman Sachs last month.

Facebook is among several fast-growing privately held Web companies, including Twitter, Zynga and Groupon, that investors have been anxious to buy into ahead of potential public listings.

— Reuters