Shares post??? sharespost.com- You can buy into privately held companies?

[JS]

Im 20, and the past year have been really doing a lot of research, and been studying the market, to know more about stocks, different types of investments etc. for my future. I always thought that you couldn't buy stock in privately held companies??? I thought it was just publicly traded companies? I came across this article on yahoo finance and it was talking about how to buy stock in facebook, twitter etc before they become publicly traded. I'm pretty confused, if someone could explain this to me, and could provide more information on sharespost.com. Just any helpful information would be great. Thanks a lot.

[raysor]

This is very suspect. Firstly the company is registered in Delaware and is NOT registered with the SEC. That makes it a bit dangerous. A private company could sell shares in a pre-IPO. I don't know about US securities law but in the UK the shares could only legally be offered to High net worth individuals/ proven sophisticated investors. I suspect they throw in a few big names like Twitter and Facebook just as a teaser. They are probably dealing in OTC/BB stocks (unlisted on a recognised exchange) which are 99% junk. You should never have a minority shareholding in a private company. My advice-- avoid.

[Ashley!]

You can by stock in these companies, however, you need one of two things in order to do it.

1) a whole lot of venture capital
2) inside connections to the companies officers

You cannot trade stock with these companies like you can with publicly held companies. Day traders certainly cannot get into these companies.