4 ms·

What does it mean trading private shares? Isn't it the property of public companies?

• destitude 6y ago
  Employees of companies that are not public but who are given stock options have no way to easily liquidate those options. This allows those employees to get some money NOW instead of hoping someday the company goes public or is bought out (which in most cases will never happen). For the buyer this allows them to get in even earlier. This is complicated of course by the fact they are not public companies and requires a lot of extra paperwork.
  • shmerl 6y ago
    I see. But anyone can buy them in practice?
    • MPSimmons 6y ago
      They're generally sold to "institutional investors" (i.e. VC, or other companies that buy chunks of millions of dollars, with agreements limiting who they can sell to, and under what conditions)