Facebook Stock Auctions Are No Longer “Significantly Oversubscribed"*
Update and Correction: Sharespost CEO David Weir says the latest Facebook auction was indeed “oversubscribed.” — Sharespost has just amended the way it describes its auctions. — “There was more than enough demand …
Context & Ripple Effects
The December $56 billion Facebook auction was reported as "significantly oversubscribed," and by January demand had doubled on SecondMarket, so the secondary markets' demand language had become a de facto valuation signal. Against that backdrop, Sharespost's walk-back — CEO David Weir confirming the latest auction was in fact oversubscribed after initially describing it otherwise — matters less as news than as evidence of how closely every adjective in these auction reports is now being read.
The episode lands during a stretch where Facebook is already managing a string of self-inflicted distractions, from the [[a:/entity/facebook|Burson-Marsteller]] criticism to leaked user access tokens, so precision about its private-market pricing carries extra weight with an IPO widely anticipated.
First-order effects
- Buyers and sellers who used the initial description to gauge demand get a corrected signal: Weir says there was more than enough demand, so sellers pricing against this auction were not facing soft interest.
Second-order effects
- Rival exchanges like SecondMarket face the same scrutiny — their own demand characterizations are being benchmarked by the press, raising the cost of loose language in private-market reports.
Third-order effects
- If the pattern holds, secondary-market operators move toward standardized, verifiable auction disclosures as pre-IPO valuations become headline economic indicators rather than niche trading data.
The trend: As Facebook's IPO approaches, secondary-market auction reports are being read as public valuation benchmarks, forcing exchanges like Sharespost toward tighter disclosure discipline.