SEC Launches Investigation Into Black Market For Tech Company Shares
The U.S. Securities and Exchange Commission (SEC) has launched a probe into the burgeoning “black market” of hot, privately held tech stock. The SEC investigation comes after the regulator observed a recent boom in the trading of such shares that was being conducted privately and thus outside the regulator’s rules.
The investigation is also examining the trend of companies selling employee-owned shares of private companies via complex derivatives transactions.
The so-called “middleman” companies have been offering to trade stock with the employees of private tech companies, which the SEC feels could be unlawful under the Dodd-Frank Act of 2010, which mandates that investors can only trade share swaps on a national securities exchange that hold a registration statement from the SEC.
According to research conducted by the Wall Street Journal there are currently 78 privately held, venture-capital-backed companies worth $1bn or more, totalling $310bn. That represents an increase of almost 50 percent. The rise in the number of valuable companies has created a market in share swaps due to the amount of privately held shares available for sale and increased investor awareness of the hot tech stocks.
Uber, valued at $40 billion and Airbnb, valued at $24 billion are two of the most actively traded and involved in the controversial derivatives products.
The SEC has thus far refused to identify the ‘middleman’ firms involved in the transactions.
In 2007 Affymetrix (Nasdaq: AFFX ) biochip maker announced that it was purchasing laboratory-reagent maker USB for about $75 million in cash. The privately held USB makes enzymes and molecular purification systems that compete with the likes of Invitrogen (Nasdaq: IVGN ) and QIAGEN (Nasdaq: QGEN ) . The USB purchase got Affymetrix's foot in the door to these other labs, where it can extol the virtues of biochips, thus expanding the biochip market and its market with speculation that Entegris (Nasdaq: ENTG ) also has it's sights on laboratory acquisition to place product into practicalities.
Bringing polyaniline into the biosensor field is a major breakthrough for nanobiotech but " biochips" are still considered nascent technology and patent law requires that an artisan be capable of utilizing the invention without undue experimentation however several BCI .A.I. and Immersive Reality "Groups" have been showing how nanotubes and carbon complexes can be used as biosensors—without showing exactly how the data was attained because biotech development and synthetic telepathy development can be used as Neurotronic Weapons and thus Homeland Security very little if any information nor financial gain concerning this technology need ever be shared with the public sector.
Shares of ATMI (NASDAQ: ATMI ) rose 25% one Tuesday in late January 2014.
Feb 2014 – Entegris, Inc. (Nasdaq: ENTG) agreed to be acquired by Entegris (NASDAQ: ENTG ) for $34 per share in cash. The deal is expected to close in Q2 and values ATMI at $1.15 billion, or roughly $850 million net of cash acquired including $170 million in net proceeds from the recent sale of ATMI's LifeSciences business