"Commoners" Keep Overvaluing Facebook, Twitter & Tesla

Last fall, NYPPEX Private Markets issued a report about how secondary market investors were overvaluing VC-backed juggernauts Facebook and Twitter. Not only were they paying more for their shares than were venture capitalists, but they were getting common stock instead of preferred stock. Now, NYPPEX is planning to release a new report suggesting that only two things have changed: (1) Secondary market investors are overpaying by even more; and (2) Facebook and Twitter have been joined by Tesla Motors. "In effect, they are betting on further significant revenue growth and a highly successful IPO," says Larry Allen, managing member of NYPPEX. "If one of those two events do not materialize, then today's secondary investors may be providing the exit." Let's take a quick look at each of the three companies: