Complete Custom Private Placement Memorandums. Personalized Service.
www.venturea.com/private
private placement
| a sale of an issue of securities by the issuing company directly to a limited number of investors, often only one or two large institutional investors, such as a bank or an insurance company (opposed to public offering ): required to be cleared but not registered with the Securities and Exchange Commission. |
Based on the Random House Dictionary, © Random House, Inc. 2009.
Cite This Source
Private Placement
Raising of capital via private rather than public placement. The result is the sale of securities to a relatively small number of investors.
Investopedia Commentary
Private placements do not have to be registered with organizations such as the SEC because no public offering is involved.
Related Links
IPO Basics Tutorial
See also: Capital, IPO, Placement, Restricted Stock, SEC
Cite This Source
private placement
- The sale of an issue of debt or equity securities to a single buyer or to a limited number of buyers without a public offering. The placement is generally conducted by an investment banker who acts as an agent in bringing together the seller and the buyer(s).
Case Study For companies needing investment capital, private placements often save time and fees compared to public offerings. In early 2000 Healtheon/WebMD Corporation issued $930 million of new stock directly to the Janus funds. From Healtheon's standpoint, the issue was taken care of quickly without the need to pay a hefty fee to the firm's investment banker, Morgan Stanley Dean Witter (now Morgan Stanley). From Janus's standpoint, the firm was able to obtain a small discount on a sizeable block of stock it wanted to buy. In addition, Janus wasn't required to take a chance on bidding up the price of Healtheon stock by buying shares in the open market. Shares included in the private placement increased Janus's stake in Healtheon from 3% to 12%, a relatively large position for a mutual fund. |
Copyright © 2003. Published by Houghton Mifflin.
Cite This Source
Copyright © 2009, Dictionary.com, LLC. All rights reserved.
