Is GSV Capital Allergic to Facebook?
With its stock getting hit hard over the past few days in the wake of Facebook’s (NASDAQ:FB) IPO drama, investment fund GSV Capital (NASDAQ:GSVC) is trying to minimize the damage by downplaying its investment in the social network.
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Shares of GSV, which famously bought into Facebook shares before the IPO, have lost 31.44 percent between Thursday last week and end-of-day Wednesday. However, according to the fund’s chief executive officer Michael Moe, Facebook only makes up 4 percent of its overall holdings, with Twitter being its largest position. GSV reportedly holds 350,000 shares of Facebook. Moe also told Benzinga that the average price at which GSV acquired Facebook shares was less than $30.
Moe said that active trading of Facebook’s shares in the second market, which led to a price discovery, and the increased supply of shares, had a negative impact on the share price on the opening day.
He added that the drama of the Facebook IPO will encourage the scenario of private companies staying private longer and retail investors being hesitant to participate in the markets.
Shares of Firsthand Technology Value Fund (NASDAQ:SVVC), another pre-IPO investor in Facebook that owns 600,000 shares of the social network, are also falling.