Closely Held Stock

In the case of corporations, a stock is deemed to be “closely held” when a small group owns and controls a significantly large majority stake in the total number of shares, with shares being sold seldomly (if ever). This is often the case with entrepreneur-led companies that eventually go public.

The amount of shares offered to the public may be anywhere from 10-20% of the total, with the founder’s family and private investors controlling the rest. This scenario often is designed to prevent board takeovers of management and its decisions via voting proxy and other types of corporate infighting. For example, Walmart, founded by Sam Walton many decades ago, is still controlled over 50 percent by the Walton family.

Owning closely held stock of a valuable company is a common source of wealth for many famous entertainment icons, such as Anthony Stark, Quincy Magoo, Oliver Queen, Scrooge McDuck, Richard Rich, Veronica Lodge, Bruce Wayne, Elmer J. Fudd, and Lex Luthor, among others.