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Finance: What is private placement? 5 Views
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Description:
What is private placement? Under Regulation D of the Act of 1933, securities can be sold to qualified private and institutional investors via private placement, meaning not open to the general public at large. Instead of an IPO, they are sold via a Private Placement Memorandum and subscription agreement. These securities can be for equity or debt and will usually be unregistered for a holding period time and bear a 144A legend until the holding period has expired.
- Social Studies / Finance
- Finance / Financial Responsibility
- College and Career / Personal Finance
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Finance and Economics / Terms and Concepts
Transcript
- 00:00
finance a la shmoop what is a private placement okay a placement means that a [Man discussing private placement]
- 00:08
company is placing its shares with some new owner in return for cash that is
- 00:14
it is placing ownership in return for capital so what's the most famous type
- 00:19
of public placement all right come on spell it come on with me now yes IPO so
- 00:24
if that's a public placement it's private kiss and cousin private [People in a car cuddling]
Full Transcript
- 00:29
placement is almost the same thing all be it with fewer rules about disclosure
- 00:33
and structure and a bunch of other regulatory stuff in fact a private
- 00:37
placement is also called a regulation D placement...Such that
- 00:43
securities are not registered with the state or the SEC the way they would be
- 00:47
in a public offering in a public offering securities can be sold to [Group of people in public securities]
- 00:51
pretty much anyone who has the dough to buy the shares and is qualified...
- 00:58
....No restrictions or requirements
- 01:02
because the government's done all the filtering but in a private offering the
- 01:06
Securities can only be sold to what is called accredited investors that is
- 01:11
investors sign a piece of paper that warrants and represents that they're [Wealth verification document signed]
- 01:15
wealthy enough to lose all the money they're putting into this investment
- 01:18
like they have over a million bucks in assets and a few hundred grand a year or
- 01:22
more and education and all that and that they're smart enough to have known not
- 01:26
to do this investment in the first place should things go awry think no training [Boy riding a bike]
- 01:31
wheels, no railing, no ambulances or cops or firemen you're on your own here in a
- 01:36
private placement there baby and yeah good luck [Man sitting by a bus stop and bus arrives]
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