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?
1. A seller wants to divest their shares.
2. Buyers are found via platforms, brokers, or direct contact.
3. Parties negotiate price and terms.
4. 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.