What is a Shareholder Agreement? A shareholder agreement outlines how a company is to be operated, the rights and obligations afforded to the shareholders, and the relationship between the company and the shareholders. It is similar to a partnership agreement, which is an arrangement between the various partners in a business. The purpose of a…
What is a Shareholder Register? A shareholder register is a list of all active and former owners of a company’s shares. The register includes details of shareholders, such as their name, address, the number of shares they own, class of shares held, date when they became a shareholder, and when they ceased being a shareholder….
What is the Shareholder Equity Ratio? The shareholder equity ratio is a ratio that shows the amount of a company’s assets that have been financed using the owner’s equity instead of debt. It shows the portion of shareholders’ funds that have been used to finance the assets of the company, and it indicates the value…
What is a Share Premium Account? A share premium account is sometimes referred to as an additional paid-in account, and it is included in the shareholder’s equity section of a balance sheet. The share premium account records the amount received that is above the subscription price of a share. Shares are considered to be issued…
What is a Sellout? A sellout is a situation where investors are compelled to dispose of their assets due to non-economic factors, such as divorce, illness, or margin calls by a brokerage firm. In times of panic, investors are more interested in generating quick liquidity than optimizing the return on the security. When an investor’s…
What is a Shareholder Activist? A shareholder activist is a shareholder who uses his or her stake in a publicly-traded company to exert pressure on management to take a certain approach. Since obtaining a controlling interest through a takeover is a costly process, shareholder activists instead leverage a relatively small stake of less than 10%…
What is a Shareholder Letter? A shareholder letter is written by the executives of a company to its shareholders, providing a detailed overview of its operations and other material events that occurred during the year. The shareholder letter informs shareholders about the annual financial results for the past year, sales and earnings, changes in management,…
What is Selling Into Strength? Selling into strength is a trading strategy that involves selling long or short when the price of an investment is rising, but before a reversal occurs. Such a strategy is designed to optimize profit before a reversal occurs in the price of the security by locking in gains or taking…
What is a Selloff? A selloff is the selling of a large volume of securities within a short time, causing a corresponding decline in its price. It occurs when a large number of a company’s shareholders sell due to various factors such as profit warnings, the threat of technological disruption, or fears of increased competition…
What is Selling Away? Selling away is an inappropriate practice by an investment professional – such as a financial adviser or stockbroker – who sells or solicits a client to purchase securities not approved by the brokerage firm with which he/she is affiliated. Generally, brokerage firms keep a list of approved securities products that their…
