right secondary stock transactions

Private Placement

  • Definition: A process where the original purchaser sells shares to a new buyer instead of the company issuing new shares.
  • Key Feature: Privately negotiated between the two parties, not through a public exchange.

Private placements are commonly utilized by companies for various reasons:

  • Efficient Capital Raising: Private placements offer a streamlined method to raise capital without the complexities associated with issuing new shares publicly.
  • Shareholder Liquidity: They provide existing shareholders with a prompt avenue to liquidate their investments, bypassing the necessity for the company to undergo the process of going public or being acquired.

Next: Right of First Refusal (RFR)