AboutPaul Henneman Expertise Stock forecasting and fair market valuations.
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Expert: Paul Henneman Date: 7/27/2007 Subject: Stocks/Shares
Question QUESTION: Hello, If a company goes private and buys back all it's stocks from investors, is that company still listed on the stock exchange? And if so, could one follow the ups and downs of the company via stocks quotes? Thank You, Pete
ANSWER: Pete,
Thank you for your question!
When a copy goes from public to prive, commonly called 'delisting', it is no longer listed on a stock exchange. There is still outstanding stock, but it is owned private, not at a public auction as represented by a stock exchange. When a company is private, there is no obligation to list the details as a public company must. So it becomes very difficult to follow a private company, and even more difficult to participate as a shareholder if you are not already one. The only way would be to approach a current shareholder directly to see if they wanted to sell some of their ownership, and to gain the shareholder's interest it would usually require a fairly substantial investment.
I hope this helps! Please do not hesitate to follow up if I can be of any additional service!
Sincerely,
Paul Henneman
ValuEngine, Inc
www.ValuEngine.com
---------- FOLLOW-UP ----------
QUESTION: Paul, Thank You for your quick response. I have a 401-k account with a company that is about to go private. I left the company two years ago and have not withdrawn any of the funds from my account. I have a substantial amount of money invested in said company through the 401-k fund. In the last two years the company has done well and my fund has increased. How would the privatization affect my fund and how would I be able to track gains and losses going forward? Thank You, Pete
Answer Pete,
That is a good question, I am honestly not sure of the details on this.
I believe what will happen is that your shares will be automatically sold at the buy back price when the company actually does go private. I would suggest checking with the human resources department at your company, or the investor relations department. If I am right, then you will have that amount in your 401k that will need to be allocated to other investments.
I am not completely sure of this, so I would strongly suggest that you check with someone in an upper management position at your company.
I hope this at least steers you in the right direction, please do not hesitate to follow up with me if I can be of any additional service!
Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com
