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Private Investment, Public Equity - PIPE
What does it mean?
This is when a private investment or mutual fund purchases common stock for a company at a discount to the current market value per share.
In Other Words...
It can take up to three months for the transaction to be finalized, since a registration statement needs to be filed with the SEC.
PIPEs aren't generally looked upon favorably by investors because these transactions usually involve hedge funds. Hedge funds are generally seeking a quick buck and are likely to sell the PIPE shares in the market, causing the share price to drop.
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Related Terms
Common Stock | Secondary Offering
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