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With the economic climate the way it is — still slightly sluggish — many companies are choosing to stay private longer. With this trend in mind, Nasdaq OMX (NASDAQ:NDAQ) forged a joint venture with one of the pioneers of the private secondary market, SharesPost, in order to tap a growing market for shares in companies that have not yet gone public.
The two companies announced Wednesday that they will launch a new online exchange later this year called NasdaqPrivateMarket, and this move could prove to be quite a help to start-up companies and young businesses. SharesPost founder Greg Brogger will be president of the joint venture, while Nasdaq will hold a majority stake
Nasdaq has never before ventured into private markets, but this type of trading led to the soaring valuations of Facebook (NASDAQ:FB), Groupon (NASDAQ:GRPN), and Zynga (NASDAQ:ZNGA) before their initial public offerings, reported The FinancialTimes. While trading in private markets did decrease abruptly after Facebook’s disastrous initial public offering last year, trading levels have recently been increasing.
As Nasdaq executive Bruce Aust told The Wall Street Journal, the exchange operator has long been interested in this particular market, but the signing of the Jumpstart Our Business Startups — or JOBS – Act last year was the needed impetus, as the law was designed to allow young companies to raise capital more easily…
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