Stock PIPE Deals Explained

You need to understand what private investments in public equities are.

In this video, we discuss what PIPE deals are, who participates in them, and how they can affect the value of your shares as an investor in public equities, stocks.

What are PIPE Deals?

“Private investment in public equity deal (PIPE Deal) refers to the practice of private investors buying a publicly-traded stock at a price below the current price available to the public. Mutual funds and other large institutional investors can strike deals to buy large chunks of stock at a preferred price.” — Investopedia

Why do companies initiate PIPE Deals?

A company may initiate a PIPE deal to raise funds more quickly and easily than they can through other avenues such as the stock market. If the company is small and its stock is unpopular on the public markets, their best option might be to do a PIPE deal.

Why do institutional investors engage in PIPE deals?

While the institutional investor realizes the shares they buy in a PIPE deal may be relatively illiquid, they have…