What sets unlisted shares apart from listed shares
Unlisted shares are not traded on an established marketplace; trading instead takes place through private transactions or smaller trading venues. This means there is no continuous price or automatic order book depth, which can make it harder to find a buyer quickly at the desired price.
In an unlisted setting, shareholders' agreements, the articles of association and internal rules can play a larger role in how a change of ownership may take place than with listed shares.
Important aspects to consider with unlisted shares
Here are some points that are often central when you are considering investing in unlisted shares.
- Trading usually takes place through private transactions
- Liquidity is usually lower than on the stock exchange
- The price can be harder to establish without an official market
- The level of information about the company can be limited
- Terms in the articles of association and agreements affect the possibility of selling
When you take these points into account, you get a better picture of what it means to own unlisted shares and what it demands of your analysis and strategy.
When unlisted shares may suit you
Worth bearing in mind
Unlisted shares can be interesting when you want to get involved in a company that is not listed on a stock exchange and where you can have a more direct connection to the company's development. Because trading is less liquid, it is important that you are prepared for your capital to be tied up for a longer period.
Investing in unlisted shares often requires more analysis and contact with the company, as the level of information can be lower than for listed shares.
Frequently asked questions
Why invest in unlisted shares?
To have the chance to invest early in companies with high growth potential that are not yet available on the stock exchange.
Are unlisted shares riskier?
Yes. Information can be more limited and trading less liquid, which makes valuation harder and the risk higher.
How do I sell unlisted shares?
Sales often take place via brokers, platforms or directly between investors. The process is more manual than for listed companies.
How is the price of unlisted shares determined?
The price is often based on previous transactions, the company's results and its growth plans. There is no daily price update as on the stock exchange.
Are agreements required when buying and selling?
Yes. In unlisted transactions, agreements and updating the share register are central steps for a correct transaction.