What are the implications of owning shares in a company that is no longer publicly traded?
Apologies if this is discussed in the article, it's partially behind a paywall.
Apologies if this is discussed in the article, it's partially behind a paywall.
It's not like you have any more control if the company happens to be public anyway.
Also, big companies, private or not, in most countries have to retain an accounting auditor.
Also, if you are a member of the company (as in you have equity) the management has a fiduciary duty toward you. (yes, yes, sure, in practice that means very little, they can siphon off the money in many creative ways), but usually people who are already minority owners have some trust in the majority owners.
In some jurisdictions there are rules about what kind of mechanisms are available for the minority shareholders, and usually the get a board seat, and so they can kind of try to audit the majority.
And in the end they can still sue, or threaten to sue, or whatever. That usually doesn't help with the valuation, and since the majority has more to lose, they can usually work out some minimally satisfactory deal between themselves.
Aaaaand if not, we can finally get the popcorn, because then usually it gets dirty and juicy.
However, investing is always a story about managing risks (so expectations). Public or private, even if it's itself an investment company, it's still just one very fragile basket. And usually there's always someone who has so different risk/expectation profile that they'll take the other end of the transaction. Anyone holding "ETR RKET" has some strange/complex ideas.
'Not on the exchange' means you don't have to follow exchange rules, but if you meet certain criteria, you're still a 'public company' and therefore subject to the same public disclosure filings etc..
Usually that has something to do with the number of shareholders, in which case, if many do actually 'hold out' it may still be de-facto a public company.
Another way of saying: 'you can't just go private because you have 50%'.
But it's also Germany/Lux/EU so it's different 'over there'.
How hard would it be to locate another 3rd party to buy my share? There's no longer an exchange to trade it on, and there might be all sorts of additional rules about how and who I can sell to.
Those are the questions each investor is asking themselves, and I assume that even with the large discount they're being offered, it's probably the better choice unless you hold a significant minority stake.
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