Buying and selling private stock

If you own shares of a public company, selling that stock is a pretty straightforward process.

However, if you own private stock, selling your shares can be a bit trickier. Since stock in private companies is not traded on the public market, your options for selling are limited. While privately held companies are not publicly traded, it is not uncommon to receive stock in a private company. Often, employees of a private company are offered shares in the business as part of their compensation plan. Additionally, many venture capitalists or private investors may purchase stock in private companies.

Through offering private company stock, entrepreneurs can build a good deal of capital to support their businesses. However, because these investments cannot be quickly sold on the public market, the investments are much less liquid than those of public companies. The simplest way to go about selling private stock is to go back to the company that originally issued it.

Often, these private companies have stock buyback programs in place, allowing you to sell your private stock without much complication. If the company does not offer a buyback program, the investor relations department might have information on investors willing to purchase company shares. Many experts recommend using a securities attorney as an intermediary to complete the transaction.

Additionally, public trading is much lower risk, since information on the company is publicly available. It can be much more difficult to find information on private companies, making it a potentially riskier investment.

A securities attorney can help mitigate risk for all parties to the transaction. Keep in mind that purchasing private stock or accepting stock as part of an employee compensation plan often requires you to hold the shares for a certain period of time before selling it.

This is called the vesting period.

How to Sell Privately Held Stocks | The Finance Base

If you purchased your stock over time, some shares may be available to sell while others may not. If you have questions, speak to the investor relations manager at the company issuing the stock. Selling private stock is not as straightforward as selling public stock.

Private Stock While privately held companies are not publicly traded, it is not uncommon to receive stock in a private company. Private Stock Buyback The simplest way to go about selling private stock is to go back to the company that originally issued it.

Vesting Keep in mind that purchasing private stock or accepting stock as part of an employee compensation plan often requires you to hold the shares for a certain period of time before selling it. What are Private Stock Offerings? Seven Tips To Sell Private Company Stock Without Violating Securities Laws JBV: What Happens to Stock Price When a Public Company Goes Private?

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