Closely Held Shares

AAA

DEFINITION of 'Closely Held Shares'

The shares in a publicly traded company held by a small number of shareholders, who are either directly affiliated with the company or management, or are majority stakeholder. Closely held shares are not publicly traded in the same manner as common shares. These companies may trade under light volume, since the majority of the shares can be held by a small group of shareholders. Companies that are closely held tend to be resistant to hostile takeovers, since the majority of shares are held within a small, interested group of shareholders.

INVESTOPEDIA EXPLAINS 'Closely Held Shares'

Closely held companies may be more stable than other companies, since share prices are determined by the company's value and not by investor sentiment. Closely held companies may not have access to the same levels of working capital as widely traded corporations, because of low trading volume. However, many companies implement both common and closely held shares.

RELATED TERMS
  1. Discounts For Lack Of Marketability ...

    A method used to help calculate the value of closely held and ...
  2. Micro Cap

    A publicly traded company in the United States that has a market ...
  3. Small Cap

    Refers to stocks with a relatively small market capitalization. ...
  4. Common Shareholder

    An individual, business or institution that holds common shares ...
  5. Insider

    A director or senior officer of a company, as well as any person ...
  6. Protected Cell Company (PCC)

    A corporate structure in which a single legal entity is comprised ...
Related Articles
  1. Investing Basics

    Stock Basics Tutorial

    If you're new to the stock market and want the basics, this is the tutorial for you!
  2. Investing Basics

    How To Invest In Private Companies

    It can be tough to invest in a company that doesn't trade on an exchange, but there are also several advantages.
  3. Investing Basics

    Why Companies Stay Private

    Many private companies prefer to stay private and find alternate sources of capital. Find out what firms have to gain by eschewing the windfall from a flashy IPO.
  4. Fundamental Analysis

    Looking For Profit In Privately-Held Companies

    Private companies offer unique opportunities for those with the knowledge and resources to take advantage.
  5. Fundamental Analysis

    How do you use Microsoft Excel to calculate liquidity ratios?

    Learn how to calculate the most common liquidity ratios in Microsoft Excel by inputting financial figures from a company's balance sheet.
  6. Economics

    America's Most Notorious Corporate Criminals

    Learn about the crimes and punishments of some of the most infamous convicted white-collar crooks.
  7. Investing Basics

    What is revenue cycle management?

    Learn more about revenue cycle management and why the healthcare industry in particular has adopted this payment process philosophy.
  8. Fundamental Analysis

    Is it important for a company always to have a high liquidity ratio?

    Understand the significance of the liquidity ratio and how it is used in conjunction with other measures to arrive at an overall evaluation of a company.
  9. Fundamental Analysis

    To what extent should you take a company's liquidity ratio into account before investing in it?

    Find out how important it is for an investor to know a company's liquidity ratio before deciding to invest, and why relying on one ratio can be dangerous.
  10. Fundamental Analysis

    How can a company quickly increase its liquidity ratio?

    Discover what high and low values in the liquidity ratio mean and what steps companies can take to improve liquidity ratios quickly.

You May Also Like

Hot Definitions
  1. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center