According to Investopedia, “stock acquisition non-open market” refers to the direct purchase or sale of shares by or to a firm. This transaction is purely confidential.
Either party may commence non-market stock transactions. For instance, the majority of transactions occur when an investor in options owns the right to buy a stock privately at a predetermined price but can sell that stock on a public exchange. Shares can also be repurchased from shareholders through a tender offer, which can be issued by a company. However, according to Investopedia, every transaction must be reported to the U.S. Securities and Exchange Commission. Investors who participate in these transactions are referred to as “insiders.” Form 4 must be submitted to the SEC when conducting a non-open market transaction. Typically, these insiders are employees, directors, and officials, but they can also be individuals. This is sometimes mistaken with insider trading or the acquisition or sale of a security based on nonpublic knowledge. In turn, this creates an unfair advantage, as not all investors have the same access and their confidence is diminished. Some economists, such as Milton Friedman, believe that insider trading is beneficial to the economy, however other experts argue that it inhibits economic growth due to the cost of capital.
