The private secondary markets will always evolve due to
the presence of market volatility. Specific regulations from governments around
the world have ensured that more private companies enter the secondary market
so that they can provide more value and returns to their investors. Recent
market studies show that in 2019 and 2020, private secondary markets have
offered more revenues while growing at a steady rate for nearly three
consecutive quarters. These trends make the future of private secondary markets
appear bright.
In this small article, you will learn about some of the
future possibilities in the private secondary market.
Several companies can seek liquidity in 2021
As Covid-19 continues to impact major economies,
experts predict that more start-ups can seek to liquidate their companies in
the second half of 2021. In general, private secondary markets like NASDAQ have
had many young companies that required early-stage liquidation. Several of
these companies sought to repurchase programs also before they decided to go
public. You can expect this trend to continue in the future as well.
Private companies will stay private.
The current market climate shows that major private
companies want to delay any secondary transaction plans. These companies even
want to re-evaluate their old IPO plan because of the impact the pandemic has
had on their normal operations. Hence, it is important for these companies to
identify the best talents so that the company can make it to the next level.
Experts expect that private companies are likely to stay private so that they
can maintain control and take more risks and carry out innovation.
Private companies enjoy less opacity than public firms,
and hence, these companies are willing to stick it out in the pandemic so that they
can make more profits in the future.
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Conclusion
The private secondary markets are going to undergo
several changes in the future, but they have consistently shown steady growth.
Companies are going to seek out liquidation but also try to retain control.
