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Investing

Secondary Market for Pre-IPO Equity Under SEC Scrutiny (GS)

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By Paul Ausick Published
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Trading shares in privately-held companies will result in Security and Exchange Commission (SEC) sanctions against two firms according to Bloomberg News citing unnamed sources.

The two firms, Felix Investments Inc. and SharesPost Inc., both engage in trading shares in companies that are not yet listed on regulated exchanges. Felix Investments creates pools in which investors can then purchase shares, and SharesPost acts as a broker between private sellers and private buyers of non-publicly traded shares.

On sharespost.com, for example, shares of Facebook are trading at $38/share, even though the stock has yet to conduct its IPO. Goldman Sachs Group Inc. (NYSE: GS) once considered selling $1.5 billion in Facebook shares to “accredited investors” before dropping the idea.

Contact [email protected] for any questions or corrections.

Disclaimer: Energy Exploration Technologies, Inc. ("EnergyX") has engaged 24/7 Wall St to publish this communication in connection with EnergyX's ongoing Regulation A offering. 24/7 Wall St has been paid in cash and may receive additional compensation. 24/7 Wall St and/or its affiliates do not currently hold securities of EnergyX.

This compensation and any current or future ownership interest could create a conflict of interest. Please consider this disclosure alongside EnergyX's offering materials. EnergyX's Regulation A offering has been qualified by the SEC. Offers and sales may be made only by means of the qualified offering circular. Before investing, carefully review the offering circular, including the risk factors. The offering circular is available at invest.energyx.com/.

Comparisons to other companies are for informational purposes only and should not imply similar results. Past performance is not indicative of future results. Market shortfall are forward‑looking estimates and are subject to substantial uncertainty. Investments in private placements, and start-up investments in particular, are long-term, illiquid, speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest in start-ups

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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