Wednesday, 15 April 2015

How to Make money through private placement, stocks



 private placement is the selling of securities to a small number  of investors in order to raise capital, it occur when a company makes offering of stocks to a small number of investors; it is done when  a company secretly offer it securities to few investors in it bid to make it through the capital market.  As from its name private placement, it is private and certain rules guide its operation because of the high risk involved.  In private placement the national stock exchange is not involved, stockbrokers are not involved and it is not advertised to the public.
 Private placement is highly risky but there is money in it, through private placement, companies can also come into the market after the initial public offers (IPOs). But here only qualified investors are invited, there is no service of a stock stockbroker because this is exclusively done out of the stock exchange. how to select good stock
 most investors prefer stock from already standing firms and will prefer securities only through the stock exchange but smart once can go  for a young but great companies; new companies that has a future. Private placement can make investors a profit of 10% - 100% of his total investment,
Is a special way small companies raise capital before they enter the stock market. Private placement are less expensive because they do not require the service of a stockbrokers, it may be the only source of income to small business,  company only pick investors  with compatible goals, most of the investors in private placement are experienced and therefore the company can carry out  complex and confidential  business transaction. Investors may offer the companies advices if they are entrepreneurs and lastly there is privacy, because company is not mandated to publish it quarterly result.
   Before going into private placement there are things to consider. A careful analysis of this will determine your success or failure: see how to approach  stocks
·         Management of the company:  checking the management team of the company is very crucial ,  because a good management can turn a company from small to large while the a bad management can liquidate a firm
·         Plans and objectives of the company: know why they need your investment , is it for expansion of the firm or for settlement of loans
·         When are they coming for listing:  a company not listed in the stock exchange is not out for the public and it shares cannot be sold to the public on the floor of the exchange. Knowing when the company is coming out for listing is very important, so that your stock get expose to the large market.
·         When will the share certificate be issued: you need your share certificate so that you can easily trade you stock at your convenience without it you cannot trade your stocks.
·         Their financial projection: know what they are expecting in the next one, two or three, this give clue of what effort they intend to put on ground.
·         Presence of institutional investors:  Are there insurance firms, banks s etc with the company you intend to invest in? If yes it is good to go.
·         What service or product are they offering:  since this are what will determine their stock value.
·         Institutional sponsorship:  a presence of this means good business.
how to make money with peny stocks

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