What are public company shares?
Public company shares are shares issued by a public limited company (publikt aktiebolag, marked AB (publ) in Sweden). By law, a public company may offer its shares to the public and can be listed on a stock exchange, but does not have to be. Public companies are subject to stricter requirements on capital, governance and reporting than private companies.
In practice, public company shares mean that investors can trade them on a stock exchange or through other trading venues where trading takes place continuously. The price is driven by supply and demand and is affected by market conditions, the company's performance and external factors.
How public company shares work
Public company shares are traded on open marketplaces and are subject to clear regulations aimed at transparency and investor protection.
- Issued by public limited companies
- May be offered to the public
- Subject to stricter transparency requirements
- Often traded on a stock exchange
- The price is driven by supply and demand
When trading in public company shares
Worth bearing in mind
When you trade public company shares, there is usually more information available than for private companies. Reporting and transparency requirements make it easier to analyse the company's results, strategy and level of risk. At the same time, public company shares are more affected by market movements and their value can swing from day to day.
It is also important to understand how the company approaches capital raising, governance and long-term strategy. Public companies often have more owners and more formal decision-making processes, which can create stability but can also mean slower change. For you as an investor, public company shares offer the opportunity for both continuous trading and diversification in your portfolio.
Frequently asked questions
What is the difference between public and private company shares?
Public company shares can be offered to the public and traded on a stock exchange, whereas private company shares can only be sold in accordance with the company's internal rules.
Does a public company have to be listed on a stock exchange?
No. A company can be public without being listed, but it has the opportunity to be listed if it meets the requirements.
Are public company shares more liquid?
Yes. Because they are often traded on a stock exchange, there are more buyers and sellers, which makes trading faster and more transparent.
What affects the price of public company shares?
It is set by the market and affected by the company's results, news, the economic cycle and investors' expectations.
Are public company shares less risky?
Not necessarily. They are more transparent but can swing sharply in value depending on market conditions.