Nasdaq Private Market (NPM) uses its legal expertise and experience with secondary trading to set up and facilitate auction-style bidding processes for private company shareholders and investors.
With companies staying private longer and dry powder continuing to remain at all-time high levels, NPM addresses the growing liquidity demands of the private market with a secondary auction format that provides competitive pricing and potentially allows company shareholders to be more involved in the transaction itself.
NPM was a valuable partner in facilitating Cohesity’s secondary tender offer that provided eligible employees and shareholders access to liquidity while giving investors an incredible opportunity.
Benefits of Secondary Auctions
Competitive Price Discovery
Companies that run auctions may benefit from competitive price discovery from sophisticated, institutional buyers, which generally leads to more transparent clearing price calculations.
Customizable Auction Parameters
Auctions provide the same level of customization, if not higher, than standard private company tender offers. Companies can name price floors and ceilings, project or limit the amount eligible to be sold in the transaction, and more.
Time to Liquidity
Depending on the structure, companies may be able to carry out company-wide auctions in less time than it takes to hold a traditional tender offer, mainly due to the 20-business day mandatory tender offer window.
Bids and asks, if applicable, are placed by buyers and sellers, with one clearing price calculated for all participants.Dutch auctions may be beneficial for companies looking to replace tender offers for secondary liquidity with a process similar to that of a public offering.
The sell-side demand is projected by the company, placing buyers in a competitive bidding process that is followed by a tender offer.Buy-side auctions may be beneficial for high-growth companies that have many interested buyers and would like to still adhere to tender offer guidelines.
Seller IOI Auctions
Prior to the transaction, sellers enter their asks for price per share and the number of shares willing to be sold.Seller IOI auctions may be beneficial for companies and executives who need to forecast demand for liquidity.
The price increases until one bidder is left; the remaining bidder wins and pays the highest bid amount.English auctions may be beneficial for investor or founder block sales, or secondary sales that are greater than $10 million.
Components such as price floor/ceiling, timing of bids/asks, seller eligibility, existing/new buyers, and more can be customized.Customizable auctions may be beneficial for all companies interested in secondary transactions.
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Related Private Company Solutions
FOR SHAREHOLDER LIQUIDITYKey Features
Tender Offers & RepurchasesNasdaq Private Market provides a technology-enabled approach to completing complex tender offers and repurchases.
- Customized Platform Environment
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- Industry-Leading Expertise
FOR ONE-OFF TRADESKey Features
Block TradesLeverage NPM's flexible technology and operational excellence to offer secondary capital with block trades.
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- Institutional Buyer Network
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FOR CORPORATE SOLUTIONSKey Features
Option Extensions, RSU Liquidity & 701 DisclosuresNasdaq Private Market provides corporate support to private companies to help facilitate secondary liquidity.
- End-to-End Technology
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