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Common Stock PIPEs |
Convertible Preferred/Debt PIPEs |
Common Stock RD Offering |
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Description |
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Company sells unregistered common stock to a targeted group of institutional investors in a private placement, with an agreement to file to register the securities typically within 30 days after the offering |
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Company sells unregistered convertible preferred stock/ convertible debt to a targeted group of institutional investors in a private placement, with an agreement to file to register the underlying securities typically within 30 days after the offering |
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Company sells registered common stock off an effective shelf registration to a targeted group of institutional investors |
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Benefits |
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No up-front SEC registration |
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Can be executed quickly |
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Limited market risk as transaction is confidential/ discreet |
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Ability to size transaction to company needs and investor appetite |
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Issues stock at a premium to current market price - less dilutive than common |
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No up-front SEC registration |
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Can be executed quickly |
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Limited market risk as transaction is confidential/ discreet |
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Ability to size transaction to company needs and investor appetite |
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Addressable investor base is broader than PIPEs |
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Typically quicker execution than PIPEs |
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Ability to size transaction to company needs and investor appetite |
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Discounts typically smaller than a common stock PIPEs |
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Pricing and
Other Considera
tions |
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Offered at a negotiated discount to recent average closing price given illiquidity of shares |
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Limited improvement to liquidity in short term |
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May require the issuance of warrants and/or investor option |
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Offered at a premium to recent average closing price |
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Leverage profile (Debt) - may require refinancing (if not converted) |
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Dividend/interest payments |
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Limited improvement to liquidity in short term |
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May require the issuance of warrants |
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Offered at slight discount to the then current market price |
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Shelf registration statement must be effective prior to transaction launch |
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Requires legal opinion and comfort letter |
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Warrants not included |
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Investors |
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Typically sold to a targeted group of investors (usually 15 or fewer, subject to offer size) |
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Opportunity to attract new institutional shareholders by offering key institutions enough shares to give them a core position |
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Investors include public cross-over investors, private equity investors, financial institutions, and hedge funds |
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Typically sold to a targeted group of investors (usually 15 or fewer, subject to offer size) |
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Opportunity to attract new institutional shareholders by offering key institutions enough shares to give them a core position |
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Investors include public cross-over investors, private equity investors, financial institutions, and hedge funds |
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Typically sold to a targeted group of investors (usually 15 or fewer, subject to offer size) |
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Opportunity to attract new institutional shareholders by offering key institutions enough shares to give them a core position |
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Investors include mutual funds, public cross-over investors, private equity investors, financial institutions and hedge funds |
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Timing |
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Offering does not require up-front SEC registration |
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Can be completed in approximatly 3 weeks or less |
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Targeted marketing over a 3-5-day time period, predominately via conference calls and a limited number of one-on-ones |
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Offering does not require up-front SEC registration |
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Can be completed in 3 weeks or less |
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Targeted marketing over a 3-5-day time period, predominately via conference calls and a limited number of one-on-ones |
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Offering requires up-front SEC registration (shelf registration statement must be effective) |
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Can be completed in 1-2 weeks |
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Targeted marketing over a 3-5-day time period, predominately via conference calls and a limited number of one-on-ones |
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