Secondary Market Indicators   Guest Post By Neil Beaton  This
article is the first of two that explore a fairly new, but
expanding, phenomena in the pricing of privately-held
securities: secondary market transactions.  In this first
article, the development of secondary markets is covered along
with a brief overview of how such markets operate. The article
then explores the trade-off of the impact of secondary market
transactions on fair value or fair market value.  In a
subsequent article, an empirical analysis of various secondary
market transactions before an initial public offering (“IPO”) is
provided compared to the pricing of those securities after these
companies completed their IPOs.  A Definition and Background
Secondary markets are defined as markets where non-public debt
and equity securities are traded either directly on the exchange
or by the use of the exchange as an intermediary.  Such traded
securities include private company stock, restricted securities,
auction-rate securities, structured p