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I've been approached about a PIPE where they want me to buy 10,000 shares at $1.00 per share. Stock is trading today at $1.65. It is restricted shares and they have to be held one year. Any Pro's out there with advise...please speak out. I am totally new to this. Thanks
-------------------- It's only money..We'll make more tomorrow!
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posted
Never heard of it. I'd try to bargain with them and tell them that you'll agree to the $1 a share if you only have to hold it for 1 day, instead of 1 year
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I know very little about PIPE's. As long as you know it is not a scam and by that I mean you would be offered this PIPE only if you already own a good chunk of their stock. PIPE's are generally only offered if you are already a large shareholder in the company. If you are not already a large shareholder I would highly question why this is being offered to you. I don't think you will find many on these boards that would be interested in the prospect of holding a stock for a year.
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A private investment firm's, mutual fund's or other qualified investors' purchase of stock in a company at a discount to the current market value per share for the purpose of raising capital. There are two main types of PIPEs - traditional and structured. A traditional PIPE is one in which stock, either common or preferred, is issued at a set price to raise capital for the issuer. A structured PIPE, on the other hand, issues convertible debt (common or preferred shares).
This financing technique is popular due to the relative efficiency in time and cost of PIPEs, compared to more traditional forms of financing such as secondary offerings. In a PIPE offering there are less regulatory issues with the SEC and there is also no need for an expensive roadshow, lowering both the costs and time it takes to receive capital. PIPEs are great for small- to medium-sized public companies, which have a hard time accessing more traditional forms of equity financing.
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DirectPlacement has gathered information on 4,069 Pipes and 5,571 investors, including how deals are structured, what the average discount-to-share price is and the names of investors by industry. It also tracks which investors specialize in death spirals (New York-based Promethean Asset Management, for example), in case issuing companies want to know which firms to avoid. For a fee, you can read all this detailed information on its Web site, PlacementTracker dot com.
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Thanks for all the info. I have read most of these things. I was hoping someone might have been involved in one in the past. I'm a gambler so I guess I will try it. This is a solid company in business since 1983. They just went public in Oct. on one of those shell deals. They are trying to raise capital. They currently have a back order for 14 million in orders (contracts) SUPPOSEDLY...I should see a 100% or more gain. I'm hoping for more. Again they are a solid company with many orders and not enough manpower or capacity to handle all of their current business.
Who knows??? I look at it as a long term mutual fund with a one year gain of 100% or more. My luck....it will be trading at .25 at the year end term.
-------------------- It's only money..We'll make more tomorrow!
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