Cogent Restricted Stock Studies –Closely held securities lack the inherent liquidity of publicly traded securities and are, therefore, less attractive for investment purposes.  It is accepted valuation practice to discount the value of closely held securities to reflect the liquidity difference between closely held securities and publicly held securities that are actively traded in public markets.  Empirical evidence for the discount for lack of marketability as demonstrated in the marketplace can be found by measuring the difference between the sales price of restricted securities and their publicly traded counterparts.  Several studies have been published providing limited data regarding the average size of indicated discounts. 

Cogent Valuation has undertaken its own proprietary study analyzing discounts observed in private placements of restricted stock.  Rather than relying on average discounts to apply to widely varying situations, we have carefully analyzed the observed discounts relative to several financial variables in order to identify the key factors that influence the magnitude of the discount.  With access to our own proprietary data, Cogent Valuation is able to determine the appropriate discount for lack of marketability based the unique facts and circumstances of each valuation engagement.