👉 Background: We know Canva as the go-to design software that’s giving Adobe a run for their money. But despite being Australia’s biggest private tech company, it hasn’t been immune to the tech industry downturn.

👉 What happened: Now, Canva just announced that they’re considering delaying their annual employee share scheme until economic conditions improve.

👉 What else: Canva doesn’t want their secondary shares selling for a lower price in the current market… because that could hurt their valuation.

What's the key learning?

💡A secondary share sale occurs when an existing shareholders sell their shares to other investors.

• For example, as an investor in Telstra, you can sell your shares to another investor In a secondary share sale. And the company doesn't receive any proceeds from the sale.

💡Since Canva isn't a public company, their shareholders (and employees) can't sell their shares on a  'liquid' secondary market, like the ASX. As a result, Canva facilitates a yearly sale of staff secondaries to allow staff to turn their wealth on paper into cash.

💡But right now, the demand for Canva shares ain't so strong and if sold on these markets, it could affect their valuation even more. So, for the moment, companies are holding off on secondary share sales until there's more action in the economy.

‍