Nasdaq Announces 'Private Market' | Summary and Q&A

TL;DR

NASDAQ is partnering with Sharepost to create an official exchange for unlisted companies, allowing investors to buy shares before they go public.

Key Insights

• 🪡 The partnership between NASDAQ and Sharepost addresses the need for a market for unlisted companies and provides greater investment opportunities for sophisticated investors.
• 🤨 The definition of a "sophisticated investor" according to the SEC raises questions about how the policy is validated and whether it safeguards investors adequately.
• ✋ The new exchange can potentially limit the chance for average investors to participate early in high-valued companies like LinkedIn and Facebook before they go public.
• ♿ The venture also benefits companies by enabling them to access capital more easily, helping to foster innovation and economic growth.
• 👻 The US has revised regulations on the number of shareholders allowed in unlisted companies to encourage more capital flow into new ventures.
• 👶 The expansion of markets and the creation of new opportunities signify an evolving investment landscape with potential implications for global markets.
• ❓ While the venture may not directly impact the UK immediately, it offers insights into future possibilities and the potential for similar market developments.

Transcript

hi everyone and welcome to another video from the motley fool i'm owen benilak and i'm here with nate weisser hey hi nate to discuss uh some news i read this morning last night i read it twice and it was uh on the news that the nasdaq exchange in the u.s is going to set up a venture with a company called sharepost which i think is based in californ... Read More

Questions & Answers

Q: What is the purpose of NASDAQ's venture with Sharepost?

The partnership aims to create an official exchange for unlisted companies, enabling investors to buy shares before they are publicly traded.

Q: Who will have access to this new exchange?

Only sophisticated investors, as defined by the SEC, will be granted access. These investors must possess sufficient knowledge and experience in evaluating business prospects.

Q: What risks are associated with investing in unlisted companies?

Investing in unlisted companies can be risky, as investors may not have enough information or means to evaluate the prospects of these businesses thoroughly.

Q: How will this venture benefit companies?

By providing a market for unlisted companies, the venture offers greater access to capital, especially for smaller companies in need of funding amidst banks' hesitations about lending.

Summary & Key Takeaways

• NASDAQ is teaming up with Sharepost to establish a market for unlisted companies, similar to how investors could buy shares of Facebook before its initial public offering.

• Access to this new exchange will only be granted to sophisticated investors who have sufficient knowledge and experience in evaluating prospective businesses.

• The system has potential benefits for both investors and companies, providing greater access to capital and allowing investors to get in on the ground floor of high-valued companies.