Series 79: PIPEs

PIPEs

PIPE stands for “private investment in public equity,” which perfectly describes this form of investment. A PIPE transaction allows a publicly traded company to make a private placement of stock with institutional investors, who usually buy the stock at a discount from the market price at the time. Because stocks sold as a part of a private placement are restricted, the investors cannot immediately sell their shares. However, as part of the PIPE agreement, the issuer pledges to register the securities with the SEC. Because a PIPE transaction is a private offe