Controlling shares and their valuation

A share is a security (certificate), which is a paper proof of your property rights in the company, and it gives you the opportunity to receive dividends in case of profitable activity of the company and ensures the right to vote at the general meetings of the founders.

Shares of companies are of two types. They are ordinary and privileged. The main advantage of the latter is that their owner is entitled to receive increased dividends. Also, their owners have the advantage of first obtaining the property of the enterprise when it is liquidated. But these shares have a drawback. The owners of such voting rights are deprived and can not vote at the general meetings of the founders. Ordinary shares do not have any advantages in obtaining dividend payments, the division of property of the enterprise when it is liquidated, but they have a guaranteed right to vote. Therefore, as a rule, large shareholders tend to buy a controlling or at least blocking stake.

The shareholding, which is fifty-one percent in total, is a controlling stake. With a large number of founders in the company, it can be valued at twenty-five percent.

Evaluation of the controlling stake is crucial for any investor wishing to acquire them. And their profitability can be determined by various methods. At the same time, the most important parameters for their assessment are the following: the liquidity of the shares, their nominal and current value, the percentage of profitability of the enterprise for two or three reporting years and, of course, future prospects.

A controlling stake and their correct assessment guarantees the investor a good return on the invested funds. The controlling block of shares gives an opportunity to manage the enterprise almost single-handedly. Here you can add more and additional opportunities, purchased with the payment of dividends.

With a controlling stake, an investor can personally influence the production process by directly participating in it, choosing suppliers, consumers. Therefore, many investors to evaluate the company 's shares turn to the best consulting agencies. As a rule, the services of such agencies are not expensive valued and can reach forty percent of the nominal value of securities.

Summarize. Evaluation of a controlling stake is very important when buying. And this statement is true for any major investor . The controlling interest in the company represents the largest share of shares concentrated among a major shareholder and gives him the opportunity to dominate and almost sole control.

This moment is sometimes the main component for the successful development of the enterprise. After all, not all founders can understand the management process well, but they have voices that can become decisive and give a numerical superiority when making economical decisions that do not justify themselves at the enterprise. Therefore, not all organizations are developing equally successfully. Many of them are barely gaining sales volumes, the proceeds of which only cover the costs of the enterprise itself. And we are not talking about profits at all.

But there are other examples of companies whose shares are constantly in price, sold on large stock markets, have good liquidity in the stock market. And, as a rule, they are headed by good managers who have a controlling stake in their hands. For example, these are well-known Russian companies, such as LUKOIL or Sberbank. Their shares have not only high liquidity in the market, but also quotations are growing steadily. Moreover, the plans of the companies stipulate an increase in the volume of dividend payments to thirty percent. And this is already interesting for all the founders and investors who want to buy these shares.