Definition
Secondary trading means existing shares change hands — unlike the primary market where the company sells new shares. In the secondary market, an existing shareholder sells their shares to a new buyer.
Why is secondary trading important?
- Liquidity — It gives shareholders the ability to sell their stakes without the company needing to go public.
- Price discovery — Secondary market transactions help establish the company's market value.
- Flexibility — Employees with stock options can realize part of their ownership.
- Access — New investors can buy into companies not actively raising capital.
How does it work in practice?
- A seller wants to divest their shares.
- Buyers are found via platforms, brokers, or direct contact.
- Parties negotiate price and terms.
- The share transfer is executed and registered in the share register.
Accumeo's role
Accumeo functions as a marketplace for secondary trading in unlisted shares. The platform helps match buyers with sellers and offers data and analysis to facilitate decision-making.
Summary
Secondary trading provides liquidity and flexibility in an otherwise illiquid market. It's a fundamental mechanism for making unlisted shares more accessible.