How does a PIPE investment work?

This is how a traditional PIPE investment works. In a structured PIPE investment, the company issues convertible debt rather than discounted shares of restricted stock. In this instance, investors who buy the debt typically have the option to convert it to shares of company stock.

What is a PIPE deal?

It is an allocation of shares in a public company not through a public offering in a stock exchange. PIPE deals are part of the primary market. In the U.S., a PIPE offering may be registered with the Securities and Exchange Commission on a registration statement or may be completed as an unregistered private placement .

What is private investment in public equity deal (PIPE deal)?

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.