Private Investment in Public Equity

(redirected from PIPE Financing)

Private Investment in Public Equity (PIPE)

Occurs when private investors take a sizable investment in publicly traded corporations. This usually occurs when equity valuations have fallen and the company is looking for new sources of capital. This is a means by which a public company gets additional access to the equity markets in express mode-- they already have public shares trading and this is an additional offering to investors under a securities purchase agreement, the issuer promises to register the shares typically via a resale registration statement within so many days after the closing.

Private Investment in Public Equity

The form of equity financing in which a private investment company purchases a certain amount of stock in a publicly-traded company at a discount from its market value. Publicly-traded companies commit to PIPE in order to raise equity without going through expense and regulatory issues involved in making a secondary offering. This form of financing is popular especially with small and medium-sized publicly-traded companies, as they often lack the resources to raise capital using other methods.

There are two types of PIPE. A traditional PIPE allows the private investment company to simply buy stock in the publicly-traded company. This is a direct form of equity financing. A structured PIPE, however, involves the publicly-traded company issuing a certain amount of convertible debt. This carries less risk for the private investment company and does not dilute the publicly-traded company's shares outstanding, at least not immediately. See also: Venture capital.
References in periodicals archive ?
2m definitive agreements in connection with a private placement, or PIPE financing with institutional and accredited investors.
198) Logically, if less companies are available for reverse mergers, less PIPE financing will also be available from hedge funds for start-up companies, further constricting credit markets.
a biotechnology company focused on discovering and developing treatments for rare and life-threatening diseases, today announced it has entered definitive agreements with institutional investors in connection with a private placement, or PIPE financing.
The closing of the PIPE financing is subject to standard closing conditions.
She also has experience representing biotechnology and medical device companies in matters related to technology licensing transactions, sponsored research, follow-on offerings, PIPE financing and assisting public companies in going private.
Haus brings a variety of skills and experience in research, investment analysis, due diligence, APO[R], reverse merger, PIPE financing, and corporate finance execution capabilities to the HFG team.
Rodman completed nearly three times as many PIPE financing transactions as its nearest competitor.
Rodman completed three times as many PIPE financing transactions as its nearest competitor.
Rodman completed more than three times as many PIPE financing transactions as its nearest competitor.
0 Million or greater, including foreign companies that issue securities using PIPE financing in the U.
Announced completion of the first tranche of PIPE financing on April 30, 2007.