How unlisted share prices are set

On an exchange, the last traded price is set continuously by thousands of buyers and sellers. Unlisted shares trade far less often, so the price you see is a quote: the price at which a dealer or platform is willing to transact right now.

What moves the quote

1. The latest funding round. When a company raises money, the price per share in that round is a strong anchor. Secondary prices can sit above it (if demand is strong) or below it (if the round was priced richly or early investors want out).

2. Listed peer valuations. If comparable listed companies trade at 30 times earnings, buyers use that as a reference point. When listed peers fall, unlisted quotes usually follow, with a lag.

3. Supply and demand. A large block of shares arriving from an early investor can push the price down. A rush of interest ahead of an expected IPO filing can push it up.

4. Fresh numbers. Annual results filed with the Registrar of Companies, or an offer document ahead of an IPO, give buyers new data. Strong growth tends to lift quotes; losses or qualified audit reports tend to cut them.

5. IPO expectations. Once a company files for an IPO, the unlisted price often starts tracking the expected listing valuation.

Why the price can look "flat"

On Finlaunch, the price only changes when our desk revises the quote. A flat line on a chart does not mean nobody cares; it means nothing material has changed since the last revision.

What this means for you

• Compare the price with the ratios on the product page: P/E, price-to-book and market cap.
• Look at how the quote has moved over the past year using the price-history chart.
• Remember that the price at which you can sell may differ from the price at which you buy, especially in a falling market.

Pricing unlisted shares is part science and part negotiation. The more you understand the drivers, the better placed you are to judge whether a quote is fair.