[coalalert] Definition of private placement

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Published on Tuesday, 06 May 2014 08:00
Written by editor

NOTE: Here's the definition of "private placement" regarding my recent posting on the CEC stock.



Definition of 'Private Placement'


The sale of securities to a relatively small number of select investors as a way of raising capital. Investors involved in private placements are usually large banks, mutual funds, insurance companies and pension funds. Private placement is the opposite of a public issue, in which securities are made available for sale on the open market.

Investopedia explains 'Private Placement'


Since a private placement is offered to a few, select individuals, the placement does... not have to be registered with the Securities and Exchange Commission. In many cases, detailed financial information is not disclosed and a the need for a prospectus is waived. Finally, since the placements are private rather than public, the average investor is only made aware of the placement after it has occurred.