Series 14: 6.2.1.2. Private Investment In Public Equity (PIPE) Transactions

6.2.1.2. Private Investment in Public Equity (PIPE) Transactions

A private investment in public equity (PIPE) transaction, also called a PIPE offering or just a PIPE, is a private placement conducted by a company that is already publicly traded. In a typical PIPE transaction, one or more institutional investors buy the issuer’s stock in a private placement, at a discount from the market price.

Normally, stocks sold in a private placement cannot immediately be resold on the open market, making them illiquid investments. However, as part of the PIPE agreement, the issuer pledges that it will register the securities with the SEC after the transaction is complete, which will remove the restriction on resell