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When Shares Couldn’t Be Sold

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Team Itus

April 3, 2026
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Today, equity markets revolve around liquidity. Investors expect to buy and sell shares freely.

But in the 17th and early 18th centuries, that wasnโ€™t always the case.

Many early joint-stock companies across Europe restricted the transfer of shares. Owners could not simply sell to anyone at any time. In several cases, transfers required approval from company directors or other shareholders.

The reason was practical.

Large trading ventures were fragile enterprises. Ships sailed for years. Capital was tied up in distant voyages. If investors exited too quickly or speculative ownership changed too frequently, it could destabilise financing and governance.

Liquidity, in other words, was viewed as a risk.

Over time, capital markets moved in the opposite direction. Liquidity became a central feature of public equities.

But the early instinct never disappeared.

Modern markets still use controlled illiquidity in many contexts:

— promoter and founder lock-in requirements

— private equity holding periods

— venture capital vesting schedules

— IPO lock-ups for insiders

These structures reflect an old understanding: ๐จ๐ฐ๐ง๐ž๐ซ๐ฌ๐ก๐ข๐ฉ ๐ฌ๐ญ๐š๐›๐ข๐ฅ๐ข๐ญ๐ฒ ๐œ๐š๐ง ๐ฌ๐จ๐ฆ๐ž๐ญ๐ข๐ฆ๐ž๐ฌ ๐ฆ๐š๐ญ๐ญ๐ž๐ซ ๐ฆ๐จ๐ซ๐ž ๐ญ๐ก๐š๐ง ๐ญ๐ซ๐š๐๐ข๐ง๐  ๐Ÿ๐ซ๐ž๐ž๐๐จ๐ฆ.

At Itus Capital Advisors, we are tracing such pivotal moments, ideas that changed the investments world through #ItusTimeMachine series, published online every Sunday.

Image: Batavia castle. Copper engraving by Johannes de Ram (around 1670).

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