Closely Held Shares

(redirected from Closely-Held Stocks)

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.
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References in periodicals archive ?
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 ....