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
how to make money with peny stocks
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