Companies with shares listed on a licensed financial product market like the exchange run by NZX Limited have to comply with the rules of the exchange.
Information varies depending on the type of shares
Only some types of share offers will have a Product Disclosure Statement (PDS). Share this! explains the difference between buying shares on primary and secondary markets and the different levels of disclosure that apply to these markets.
Initial Public Offer (IPO)
This is the process of publicly offering shares to investors and listing on the share market. An IPO (also called a float or listing) may involve the issue of new shares to raise more capital for the company or the sale of shares previously owned by other shareholders.
Unlisted shares may be hard to sell
Unlisted shares aren’t on an exchange and there may not be an established market for their sales.
The value of your shares might fall
The company you’ve invested in could perform poorly or fail. The share price could stay weak for a long time if the company consistently disappoints investors. Dividends may also fall if profits fall, or the company decides to keep more of its profits to reinvest in the business.
Your shareholding may be reduced
This can happen when the company you’ve invested in offers to sell you new shares to raise money but you don’t take up the offer. It can also happen when the company raises capital using complex investments that can cause your initial investment to be sharply reduced if you don’t know what to do with them.
Information about the share market and investing in shares can get quite technical and along with that comes a lot of specialised language and jargon. See our simple guide to sharemarket jargon.