The Comprehensive Guide to

Passive Income Investing


Learn the secrets of how Paul Tracy generates over $XXX,XXX per month in passive income!

How to Become Financially Independent Through Passive Income Investing

What is Going Private?

The term going private refers to a company's departure from listing shares on any exchange. It is the opposite of going public.

How Does Going Private Work?

The primary activity involved in going private is deregistering a company's securities with the SEC. Companies that were once public can go private if it has fewer than 300 shareholders (or fewer than 500 shareholders in some circumstances). Companies might also go private when another company or entity makes an offer to buy all or most of the company's publicly held shares, the company merges with another company, or the company declares a reverse stock split that brings the number of shareholders below the legal threshold.

When those things occur, the company becomes ineligible for listing on an exchange or registration with the SEC, according to rule 13E-3 of the Securities Exchange Act. A company must file a Schedule 13E-3 to officially go private.

Why Does Going Private Matter?

Going private can happen for several reasons. One of these reasons is that a company's shares are no longer widely held or actively traded and thus do not meet the minimum requirements of being listed on an exchange.

There are several advantages to going private as well, particularly fewer special governance considerations and fewer disclosure requirements that can be time-consuming and expensive. Going private also means less analyst coverage, media coverage, and pressure to address both short-term and long-term trends in the share price.

Ask an Expert about Going Private

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Going Private.

Be the first to ask a question

If you have a question about Going Private, then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.