Nasdaq Private Market

Last updated
Nasdaq Private Market
Company type Private
IndustryFinance and Marketplaces
Founded2004 (as Restricted Stock Partners, Inc.)
Founder
  • Eric Folkemer
  • Nelson Griggs
Headquarters New York City, U.S.
Area served
Worldwide
Key people
  • Eric Folkemer (president & Chief Operating Officer)
  • Tom Callahan (CEO)
ProductsMarketplace Services
Financial Data
Number of employees
100+ (2009)
Parent Nasdaq, Inc.
Website www.nasdaqprivatemarket.com

Nasdaq Private Market (NPM) provides a secondary market trading venue for issuers, brokers, shareholders, and prospective investors of private company stock. Since inception, NPM has facilitated more than $40 billion in transactional volume and has worked with 400+ private companies and 100,000+ employees, stakeholders, and investors. NPM offers private company and investors different solutions including tender offers, auctions, block trades, and custom company marketplaces. In 2021, NPM spun-off of Nasdaq to become its own, independent company receiving strategic investments from Silicon Valley Bank, Citi, Goldman Sachs, Morgan Stanley, and Allen and Co. [1] [ better source needed ]

Contents

SecondMarket Solutions changed its name to NASDAQ Private Market after being acquired by NASDAQ in a joint venture with SharesPost. In October 2015 NASDAQ took full ownership of NASDAQ Private Market. [2] Prior to using the name SecondMarket the company was known as Restricted Stock Partners, Inc.

History

SecondMarket was founded in 2004 by Barry Silbert to provide liquidity for restricted securities in public companies. Beginning in early 2008, SecondMarket expanded into other asset classes—first auction‐rate securities, then bankruptcy claims, limited partnership interests, structured products (MBS, CDO, ABS), [3] whole loans, private company stock, government IOUs and bitcoins. [4] [5]

In 2007, the company raised an undisclosed amount of Series A financing from venture capital firm Pequot Ventures. [6] In February 2010, the company raised US$15 million in Series B funding to aid its expansion into Asia. [7] In November 2011, the company announced that they had closed a US$15 million Series C round, led by The Social+Capital Partnership. [8] The last round of investment valued SecondMarket at US$200 million, up from a valuation of about US$150 million set in the previous round in February 2010. [9]

The World Economic Forum listed the company as a Technology Pioneer for 2011. [10]

The firm's private-company transactions totaled $100 million in 2009, and $400 million in 2010. SecondMarket takes fees from 3 to 5 percent on each trade (split evenly between buyer and seller). In March 2011, it had 53,000 registered participants, up from 35,000 in 2010, 6,500 in 2009 and 2,500 in 2008. [11]

In 2015, NASDAQ acquired Second Market Solutions, which was a competitor to NASDAQ's Private Market initiative. [12] NASDAQ rebranded Second Market Solutions as NASDAQ Private Market.

Markets Trading on SecondMarket

Restricted Securities in Public Companies

Restricted securities, SecondMarket's initial market, utilizes privately negotiated transactions to provide access to liquidity in the trillion dollar restricted securities market. [13] [14]

Bankruptcy Claims Market

SecondMarket entered into the bankruptcy claims market in June 2008 by acquiring Trade Receivable Exchange, Inc. (T-REX) of Denver, at the time the largest online auction platform serving the bankruptcy trade claims market. [15] [ better source needed ]

Limited Partnership Interests Market

In February 2009, SecondMarket opened its marketplace to limited partnership (LP) interests, which are ownership rights in investment entities such as private equity funds, real estate funds, hedge funds, and fund of funds. Through this market, current limited partners are able to transfer future capital commitments to other investors. [16]

Structured Products

In April 2009, Secondmarket opened the collateralized debt obligation (CDO) and mortgage-backed security (MBS) markets. [17]

Whole Loans

Launched in April 2009, [17] SecondMarket's whole loans market facilitates transactions in residential, commercial and specialty loan types. SecondMarket transacts in both performing and non-performing individual loans as well as entire loan portfolios.

Private Company Stock Market

SecondMarket's market for stock in private companies opened in April 2009 and facilitates transactions in both debt and equity securities in private companies. [18] Through SecondMarket, private companies can opt into an organized, controlled private environment that offers early investors and employee shareholders exit opportunity prior to an IPO or M&A event. [19]

Government IOUs

SecondMarket's government warrant market facilitates transactions in registered warrants (IOUs) issued by state governments. When the state of California issued warrants to its creditors in mid-2009, SecondMarket opened up a market place to facilitate the trading of government IOUs. [20]

Bitcoin

The Bitcoin Investment Trust (BIT) is a private, open-ended trust that derives its value solely from the price of bitcoin. The NASDAQ Private Market (formerly known as "SecondMarket") acts as the custodian and the trust is audited by Ernst & Young. [4] [5] The trust is managed through a subsidiary of SecondMarket, which is the Digital Currency Group and Grayscale. [21] Grayscale also manages the Ethereum Classic Investment Trust

SecondMarket (now known as the NASDAQ Private Market) announced in February 2014 that it planned to open a regulated, US-based bitcoin exchange. [21] It was planning to spin off a separate company for all its Bitcoin activities. [21]

See also

Related Research Articles

<span class="mw-page-title-main">Stock exchange</span> Organization that provides services for stock brokers and traders to trade securities

A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividends. Securities traded on a stock exchange include stock issued by listed companies, unit trusts, derivatives, pooled investment products and bonds. Stock exchanges often function as "continuous auction" markets with buyers and sellers consummating transactions via open outcry at a central location such as the floor of the exchange or by using an electronic system to process financial transactions.

Private equity (PE) is stock in a private company that does not offer stock to the general public. In the field of finance, private equity is offered instead to specialized investment funds and limited partnerships that take an active role in the management and structuring of the companies. In casual usage, "private equity" can refer to these investment firms, rather than the companies in which that they invest.

<span class="mw-page-title-main">Fidelity Investments</span> American multinational financial services corporation

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), is an American multinational financial services corporation based in Boston, Massachusetts. Established in 1946, the company is one of the largest asset managers in the world, with $5.4 trillion in assets under management, and $14.1 trillion in assets under administration, as of June 2024, Fidelity Investments operates a brokerage firm, manages a large family of mutual funds, provides fund distribution and investment advice, retirement services, index funds, wealth management, securities execution and clearance, asset custody, and life insurance.

An exchange-traded fund (ETF) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars. Many ETFs provide some level of diversification compared to owning an individual stock.

The secondary market, also called the aftermarket and follow on public offering, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. The initial sale of the security by the issuer to a purchaser, who pays proceeds to the issuer, is the primary market. All sales after the initial sale of the security are sales in the secondary market. Whereas the term primary market refers to the market for new issues of securities, and "[a] market is primary if the proceeds of sales go to the issuer of the securities sold," the secondary market in contrast is the market created by the later trading of such securities.

<span class="mw-page-title-main">Nasdaq, Inc.</span> American multinational financial services corporation

Nasdaq, Inc. is an American multinational financial services corporation that owns and operates three stock exchanges in the United States: the namesake Nasdaq stock exchange, the Philadelphia Stock Exchange, and the Boston Stock Exchange, and seven European stock exchanges: Nasdaq Copenhagen, Nasdaq Helsinki, Nasdaq Iceland, Nasdaq Riga, Nasdaq Stockholm, Nasdaq Tallinn, and Nasdaq Vilnius. It is headquartered in New York City, and its president and chief executive officer is Adena Friedman.

Prosper Marketplace, Inc. is a San Francisco, California-based financial services company. Prosper Funding LLC, one of its subsidiaries, operates Prosper.com, a website where individuals can request to borrow money, open a credit card, or invest in personal loans.

<span class="mw-page-title-main">Intercontinental Exchange</span> American exchange and clearing house company

Intercontinental Exchange, Inc. (ICE) is an American multinational financial services company formed in 2000 that operates global financial exchanges and clearing houses and provides mortgage technology, data and listing services. Listed on the Fortune 500, S&P 500, and Russell 1000, the company owns exchanges for financial and commodity markets, and operates 12 regulated exchanges and marketplaces. This includes ICE futures exchanges in the United States, Canada, and Europe; the Liffe futures exchanges in Europe; the New York Stock Exchange; equity options exchanges; and OTC energy, credit, and equity markets.

LendingClub is a financial services company headquartered in San Francisco, California. It was the first peer-to-peer lender to register its offerings as securities with the Securities and Exchange Commission (SEC), and to offer loan trading on a secondary market. At its height, LendingClub was the world's largest peer-to-peer lending platform. The company reported that $15.98 billion in loans had been originated through its platform up to December 31, 2015.

A Business Development Company ("BDC") is a form of unregistered closed-end investment company in the United States that invests in small and mid-sized businesses. This form of company was created by the US Congress in 1980 in the amendments to the Investment Company Act of 1940. Publicly filing firms may elect regulation as BDCs if they meet certain requirements of the Investment Company Act.

<span class="mw-page-title-main">History of private equity and venture capital</span>

The history of private equity, venture capital, and the development of these asset classes has occurred through a series of boom-and-bust cycles since the middle of the 20th century. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel, although interrelated tracks.

<span class="mw-page-title-main">Private equity in the 1990s</span>

Private equity in the 1990s relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital, experienced growth along parallel although interrelated tracks.

<span class="mw-page-title-main">Private equity in the 2000s</span>

Private equity in the 2000s represents one of the major growth periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital expanded along parallel and interrelated tracks.

Publicly traded private equity refers to an investment firm or investment vehicle, which makes investments conforming to one of the various private equity strategies, and is listed on a public stock exchange.

<span class="mw-page-title-main">Electronic trading platform</span> Software for trading financial products

In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products can be traded by the trading platform, over a communication network with a financial intermediary or directly between the participants or members of the trading platform. This includes products such as stocks, bonds, currencies, commodities, derivatives and others, with a financial intermediary such as brokers, market makers, Investment banks or stock exchanges. Such platforms allow electronic trading to be carried out by users from any location and are in contrast to traditional floor trading using open outcry and telephone-based trading. Sometimes the term trading platform is also used in reference to the trading software alone.

Blockchain.com is a cryptocurrency financial services company. The company began as the first Bitcoin blockchain explorer in 2011 and later created a cryptocurrency wallet that accounted for 28% of bitcoin transactions between 2012 and 2020. It also operates a cryptocurrency exchange and provides institutional markets lending business and data, charts, and analytics.

Golub Capital is a credit asset manager based in the United States with over $60 billion of capital under management. The firm has primary business lines in middle market lending, late stage lending, and broadly syndicated loans. The firm is also affiliated with Golub Capital BDC, Inc., a business development company that trades on the NASDAQ under the stock ticker symbol, GBDC. Golub Capital is one of the largest non-bank middle market lenders and providers of senior debt.

<span class="mw-page-title-main">Digital Currency Group</span> American venture capital company

Digital Currency Group Inc. (DCG) is a venture capital company focusing on the digital currency market. It is located in Stamford, Connecticut. The company has the subsidiaries Foundry, Genesis, Grayscale Investments, and Luno. It also formerly owned CoinDesk.

Securitize, Inc is a financial technology company that provides businesses a platform to raise capital from institutional, accredited or retail investors (crowdfunding) with shares issued in the form of digital tokens recorded on the blockchain, including for Oddity and digital custodian Exodus, which used the Securitize platform to raise $75 million in 2021. Securitize also operates a broker-dealer marketplace on which tokenized shares in private companies are traded. Securitize has approximately 3,000 clients with a combined 1.2 million investors and is regulated by both the U.S. Securities and Exchange Commission and FINRA. In June 2022, Securitize became authorized by the Spanish government to enter its securities test environment.

BTCS Inc. is a blockchain technology company that allows investors to stake digital assets on a decentralized platform integrated by the Web3 data network protocol. In June 2013, the company was cofounded by Michal Handerhan, Timothy Sidie and Charles W. Allen and headquartered in Arlington, Virginia. BTCS is the first company that rewards shareholders in Bitcoin cryptocurrency dividends payouts. In BTCS was listed as a publicly traded company on the Nasdaq Capital Market in February 2014 under the ticker symbol of "BTCS." BTCS hosts an online e-commerce marketplace where cryptocurrency investors may purchase merchandise with virtual assets such as Bitcoin ($BTC) and Ethereum ($ETH). BTCS Inc. authenticates proof-of-stake (PoS) with proof-of-work (PoW) concept by providing public signature for blockchain transactions.

References

  1. ↑ "Nasdaq, SVB, Citi, Goldman Sachs, and Morgan Stanley Launch New Platform for Trading Private Company Stock | Nasdaq, Inc". ir.nasdaq.com. Retrieved 2022-03-25.
  2. ↑ Roof, Katie. "NASDAQ Acquires SecondMarket To Help Startups Sell Shares" . Retrieved 8 March 2017.
  3. ↑ "SecondMarket, Inc". BusinessWeek. 2009-12-10. Archived from the original on June 21, 2009. Retrieved 7 December 2009.
  4. 1 2 "SecondMarket Starts First U.S. Trust for Bitcoin Virtual Money". Bloomberg. 2013-09-26. Retrieved 27 September 2013.
  5. 1 2 "SecondMarket Establishes New Bitcoin Trust for Accredited Investors". Entrepreneur. 2013-09-26. Retrieved 27 September 2013.
  6. ↑ Restricted Stock Partners Secures Funding From Pequot Ventures Archived 2012-06-11 at the Wayback Machine . September 19, 2007
  7. ↑ "SecondMarket Eyes Asia Expansion" [ dead link ]. CNBC. Retrieved June 18, 2010.
  8. ↑ Epsom, Rip (2011-11-01). "Former Facebook VP Chamath Palihapitiya Invests $15 Million In SecondMarket, Joins Board". TechCrunch. Retrieved 2013-04-29.
  9. ↑ Ante, Spencer (2011-11-02). "SecondMarket Gets Its Own Funding". The Wall Street Journal. Retrieved 2013-04-29.
  10. ↑ Thirty-One Visionary Companies Selected as Technology Pioneers 2011
  11. ↑ Bloomberg Markets, June 2011, pp. 33-44.
  12. ↑ Stynes, Tess; Hope, Bradley (22 October 2015). "Nasdaq Acquires SecondMarket, Profit Rises 12%" . Retrieved 8 March 2017– via www.wsj.com.
  13. ↑ Anderson, Jenny (2005-05-28). "Market Place; Seeking Unlimited Success From Providing a Market for Restricted Stock". The New York Times. Retrieved 7 December 2009.
  14. ↑ Zuill, Lilla (2007-09-19). "Restricted, Distressed Securities Get E-marketplace". Reuters. Retrieved 7 December 2009.
  15. ↑ "Restricted Stock Partners Acquires T-REX". PR Newswire.
  16. ↑ "Private equity investors flock to sale platform". Financial Times. 2009-02-24. Retrieved 7 December 2009.
  17. 1 2 Demos, Telis (2009-04-14). "Trading the untradable pays off". CNN Money. Retrieved 7 December 2009.
  18. ↑ "With Private Trades, Venture Capital Seeks a New Way Out". New York Times. 2009-04-22. Retrieved 11 January 2010.
  19. ↑ "How Can Twitter And Facebook Employees Cash Out Now". Washington Post. 2009-06-23. Retrieved 7 December 2009.
  20. ↑ "California IOUs set for trade". dBusinessNews. 2009-06-16. Retrieved 11 January 2010.
  21. 1 2 3 "SecondMarket plans regulated bitcoin exchange". Reuters. 25 February 2014.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.