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Home » Assessment of the Market Value of Unlisted Shares

Assessment of the Market Value of Unlisted Shares

The stock exchange market is cyclical, due to which functions of a growing component can bring high profitability, and while falling, decent losses. For calculating, foreseeing, and finally securing investments, you need to evaluate an organization’s shares that are a party to the contract. Listed and Unlisted shares both take part in stock exchange turnover. However, the former are defined by the content of the requirements required by the exchange floor. And the unlisted ones are available on various OTC markets. Which provides small companies with a fair chance to sell their shares.

Listed and Unlisted Shares

Both of these are shares that participate in the turnover on stock exchanges. Although, both of them have different approaches for estimating their real value. Unlisted share buy / sell activities require a high degree of professionalism from its participants, considering they have to face multiple, sometimes high risks.

Generally, unlisted shares are issued from small or mid-level organizations, especially those at the starting phase. Their business and who do not have enough capital to compete with large companies. These shares are recorded on the balance sheet at the market or par value. They have indeed increased risks but also upside potential. Some of them are traded on a specialized platform like Unlisted Assets, designed for unlisted shares.

The value of any listed share available on the stock exchange is determined as the valuation date. Using multiple approaches that include comparative, cost, profitability, etc. The estimation of real value includes various methods, for example, the type of security- ordinary, preferred, and so on. Its characteristics, the position held in the market for a certain period. The possibility of using shares outside the exchange, as well as exchange turnover.

Pre IPO Shares Dealers

For finding the real value of an unlisted share, the entire business of the pre IPO shares dealers is assessed. You can determine its value by checking the accounting statements for five years. All existing assets of the company are checked, and all non-residential property belonging to it is assessed. For evaluating unlisted shares, a broker checks information about loans and the procedure for their payment. Pays special attention to fixed assets, checks the documentation for audits, the presence of existing debt, leased property. And the terms of the contract and whether there are any subsidiaries.

business man holding phone in his hand

In certain cases stipulated by law, it becomes necessary to evaluate unlisted shares, for example, while calculating the taxable base. In the case of inheritance or donation, merger of companies, while redeeming a package of issued securities. The cost of the bonus payment can be added to the controlling stake. However, while buying a small stake, a corrective measure is used to determine the estimated value. Which takes the liquidity of the stake into account. There are multiple investment companies available in the market which provide experts for valuing securities. And help you understand the assortment of investment proposals in the stock exchange.

Where to Buy Unlisted Shares Online?

Conveniently, unlisted share buying/selling can be done remotely using the website. For those who are still thinking about where to buy unlisted shares, this intermediary will be one of the best options. On the site, you can look at the information on securities, both all at once and in certain industries, interact with sellers in order to make a decision. A choice of 3 tariffs, “Investor”, “Trader” and “Easy payments”, so that all market participants can find suitable options.