"In business, economics or investment, market liquidity is an asset's ability to be sold without causing a significant movement in the price and with minimum loss of value.

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Another elegant definition of liquidity is the probability that the next trade is executed at a price equal to the last one. A market may be considered deeply liquid if there are ready and willing buyers and sellers in large quantities.

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The liquidity of a product can be measured as how often it is bought and sold; this is known as volume."

I don't think any sane investor would consider private shares of Facebook "plenty" liquid. The volume of Facebook trading is so low that when a large trade of it does occur, as in this additional investment that valued it at $33b, the price jumps wildly and it makes news.

As per the secondary market, Sharespost shows the last contract traded on their system being over 3 weeks ago, and that there are only 3 people willing to sell and 5 people willing to buy right now. Those are pathetic numbers.

Granted, shares are not entirely illiquid either. You could sell your shares... but it's a necessity that the more you want to sell, the lower your price is going to have to be to attract enough buyers.

Ok, point taken, but compared to the total number of facebook shares I would imagine that is a relatively small amount traded? (the site requires registration for any data to be even visible)