Closely Held Shares

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Closely Held Shares

Shares in a publicly-traded company in which a small group of shareholders control the majority of the shares. These majority shareholders tend to hold on to the company's stock, and, as such, only minority shares are traded, leading to light trade volume. Closely held companies are, by their nature, resistant to hostile takeovers and proxy wars. They tend to be more stable than other companies because their share prices are not determined by (sometimes irrational) investment decisions, but by the value of the company itself. However, closely held companies do not have access to as much working capital as corporations with more shareholders.
References in periodicals archive ?
SDIRA Services supports a wide range of alternative investment vehicles within its Traditional, Roth, SEP and SIMPLE IRA accounts, including: real estate, trust deeds, mortgage notes, precious metals, promissory notes, closely-held stocks, private limited partnerships, limited liability companies and more.
Therefore, independent agents should be used more frequently by Lloyds and closely-held stocks because the value of bonding against opportunistic behavior should be higher for these ownership structures.
In particular, the independent agency system is adopted by a higher percentage of Lloyds and closely-held stocks, followed in order by widely-held stocks, mutuals, mutual-owned stocks, reciprocals, and association-owned stocks.
The results (reported in the last three columns of Table 2) show that independent agency insurers (in terms of both mean and median) write more business than exclusive agency insurers in Lloyds, closely-held stocks, and widely-held stocks.
For example, the fraction of direct premiums written by independent agency insurers is 82 percent for widely-held stocks, 95 percent for closely-held stocks, and 95 percent for Lloyds.
According to the ruling, "Potential future income is a major factor in many valuations of closely-held stocks, and all information concerning past income which will be helpful in predicting the future should be secured .
SDIRA Services specializes in allowing a wide range of alternative investment vehicles within its Traditional, Roth, SEP and SIMPLE IRA accounts, which include: real estate, trust deeds, mortgages, tax liens, precious metals, promissory notes, closely-held stocks, private limited partnerships, limited liability companies and more.
In the next section, we classify ownership of stock insurers and discuss the differences between widely-held stocks, closely-held stocks, stocks owned by mutual insurers, and stocks owned by associations.
In cases where the functions are only partially merged (both Lloyd's and closely-held stocks employ managers who are not owners), the owners have stronger incentives to more actively monitor managers' decisions.
Because the benefits of both closely-held stocks and Lloyd's stem from managerial discretion, we expect these structures to have a comparative advantage in writing insurance where discretion is important.
Similarly, because of the managerial control problem, Lloyd's associations and closely-held stocks should more frequently offer coverage where discretion in adjusting rates to changing risks is most important.
Bloom and his colleagues at Duff & Phelps, LLC have extensive experience in valuing closely-held stocks for gifting and other purposes, and would be an excellent resource to help readers understand why and how they should take advantage of this unexpected benefit of Wall Street's recent slide.