November 29, 2021

By -

Jamie Green

When it comes to trading shares, most investors think of trading shares on a stock exchange such as the ASX or Nasdaq. When an investor is ready to trade, they place a buy or sell order via a trading platform or stockbroker. But for investors trading shares in unlisted private companies, the process of buying and selling is now just as easy.

We take a closer look at investing and trading in unlisted shares, as well as the online trading platform making unlisted share trading simple for both buyers and sellers.

Investing in unlisted shares

Unlisted shares are shares in companies that aren’t listed on any stock exchange. With a potentially small market presence, no ASX premium and limited investors, unlisted companies can offer attractive investment opportunities. By tapping into this lesser-known market, investors have the potential to make a significant return on their investment.

“The opportunity to buy unlisted shares and get in early with pre-IPO companies is becoming an exciting prospect for traditional investors. For example we had an unlisted company list onto our platform at around 10 cents a share that now trades at $3.90 per share. This represents over 3,800%^ share price growth in less than 18 months. It demonstrates how buying shares before a company lists on the ASX or gets taken over by private equity firms can be lucrative for investors.

While investing in private companies can be rewarding for investors, a company’s status of being unlisted also presents some challenges. These can include:

  • Liquidity issues: With no ready market to trade and a lack of visibility of unlisted opportunities, companies find it difficult to attract investment as shares can be difficult to trade for both buyers and sellers.
  • Lack of price transparency: Buyers and sellers need to negotiate on the price of each transaction, creating uncertainty around the value of an investment.
  • Limited financial information: Unlike publicly listed companies, private companies have no obligation to publicly disclose their key financial information to potential investors.
  • Employee trading: While offering equity to employees can work as a valuable incentive, employees in unlisted companies often find them unappealing as there is no market to trade them.

PrimaryMarkets has solved these challenges by creating a central trading platform to enable investment in unlisted companies which is fast attracting significant and growing investor interest.

At PrimaryMarkets, we have seen a huge demand for shares in private companies with investors actively looking for pre-IPO opportunities.

Trading Unlisted Shares

Unlike trading shares on the ASX or Nasdaq, there has not been a simple and transparent platform to trade unlisted shares. Historically a seller needed to find a suitable buyer, negotiate a price, and then facilitate this process off-market. How this is conducted can vary from company to company and there is also risk around cash funding transfers to pay for the shares.

For smaller companies and with a low volume of transactions, trading was generally carried out directly with sellers by the company itself or via a stock broker.

Typically, this involved selling shares via the wholesale market where transactions are slower to execute and can involve long negotiations.

Both these options come with a level of uncertainty, administrative burden, and a limited pool of investors to choose from. This is what led to the creation of PrimaryMarkets global online trading platform dedicated to trading unlisted shares and securities.

The #1 online trading platform for unlisted shares

PrimaryMarkets brings together sophisticated investors interested in buying and selling unlisted shares via an online global trading platform. It provides an avenue for investors to sell shares, buyers to access unlisted opportunities and for companies to raise capital.

The platform enables a simple trading process which includes:

  • Easy placing of buy and sell orders (with market price limits)
  • Price transparency with the ability to see the buy/sell order depth, share price history, and real-time prices.
  • Access to company information, for example financials, presentations, recent media articles, CEO interviews, and more.
  • Safe and secure trading with KYC and AML undertaken for all trades, as well as an independent escrow process for settling funds.

In addition to making trading easier companies looking to list on the PrimaryMarkets platform have more control over their trading terms. They can determine their own rules around setting pricing, trading windows, and have the opportunity to restrict sales e.g. only to current shareholders.

The latest unlisted investment opportunities

PrimaryMarkets has a number of opportunities available on the platform including trading in unlisted companies, opportunities to invest in international funds, trading unicorns stocks and a number of capital raising investment opportunities.

If you are interested in finding out more about the latest investment opportunities take a look at what companies are currently trading on the PrimaryMarkets platform.

^ Past performance is not an indication of future performance. In reporting past performance, individual circumstances have not been taken into account and returns can vary depending on an individual’s situation. Before making an investment decision, you should consider your circumstances and whether the information on our website is applicable to your situation.

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