Business is booming at SecondMarket.com. The secondary exchange lets high-net-worth investors buy and sell shares in private companies including some of the tech world’s brightest lights; companies like Twitter, Facebook, Zynga and Groupon.

Over the past six months, the number of SecondMarket participants surged 152 percent to 53,000. Most of that’s thanks to interest in buying Facebook stock.

Facebook shares, which trade in weekly eBay-style auctions on the site, accounted for more than 40 percent of SecondMarket’s transactions last month, according to Bloomberg Markets.

While most of us would probably love to get our hands on some pre-IPO Facebook shares, there’s little transparency and even less liquidity on secondary exchanges. That’s one of the reasons we’ve seen eye-popping valuations on Facebook. One of SecondMarket’s largest competitors, SharesPost, cautions investors against blindly buying stock in trendy private companies.

In a single day of trading in January, SharesPost points out one group of investors bought a block of Facebook shares for less than $30 each. The same day, another group of investors spent $60 a share for Facebook stock.

Without access to proper financial statements, investors are taking on significant risk when they wade into secondary exchanges. And now it appears the SEC may be considering relaxing rules to make secondary trading easier. Bloomberg Markets reports that SEC Chairman Mary Schapiro indicated as much in a letter to California Representative Darrell Issa.

Schapiro wrote that she was considering raising the limit on the number of shareholders a private company can have without reporting financial information to the commission. That number’s currently 499. If it’s raised significantly, volume on private exchanges will likely spike as employees at companies like Facebook and Twitter may be given more leeway to sell off shares they’ve accumulated.

That would probably drive up Facebook shares higher – even without an accurate look at the company’s earnings and financial prospects. It doesn’t seem to matter right now, though.

“People aren’t buying Facebook for its revenues in 2010,” Wedbush Inc. analyst Lou Kerner tells Bloomberg Markets. “They’re buying it for what it’s going to be doing in 2015. We believe if it were public, it would be worth in excess of $100 billion.”

People want Facebook shares, and SecondMarket’s one of the few places they can get them – no matter what the price may be.

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Tags: Facebook, Facebook IPO, SecondMarket, SharesPost

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