20111102 groupon
The Groupon logo is displayed on the company's website June 2, 2011 in Chicago, Ill. - 

Steve Chiotakis: Later today, Groupon will unveil the price of its stock that's likely going to start trading tomorrow, valuing the company far less than expected.

But Marketplace's Steve Henn reports Groupon shares have been selling for more on private markets.

Steve Henn: The creation of big public markets for shares of still-privately held tech companies has transformed Silicon Valley. Entrepreneurs here can now cash out before their companies even go public. Bubbles can inflate and pop before an IPO.

Steve Kam: We are talking about an uniformed market, by and large.

Steve Kam is a Bay Area tech investor. He says private companies like Groupon that trade on so-called secondary markets don't have to disclose a lot of details about their books. That means:

Kam: Uninformed transactions. Uninformed buyers and sellers. Uninformed pricing. That's the problem with the secondary market.

When Groupon filed to go public, investors finally got a good look at its books, and enthusiasm cooled.

Jack Coffee is a securities professor at Columbia University.

Jack Coffee: Sordid things occur in this sort of shadowy world of being part public and part private.

This summer, trades on secondary markets pegged Groupon's value at close to $20 billion. Today, it's roughly half that.

In Silicon Valley, I'm Steve Henn for Marketplace.