Replies to post #83996 on Biotech Values

[wallstarb]

WRONG

PIPE's generally are REGISTERED shares - you can't sell unregistered shares. And PIPE are underwritten.

You are probrably thinking of a SECONDARY OFFERING which is open to the public a PIPE is not open and thats the difference. Now some pipes may be unregistred shares but not many PIPEs any more do unregistred except in extreme cases like they were doing with GS and C last year. Those were structured PIPEs and they did converts. Essentially a PIPE is a quick way for a small company to raise cash without the dog and pony shows.

I've been involved in many PIPEs so this will be my last comment on it. But MNTA was a PIPE, it wasn't open to the public PERIOD.

[rkrw]

I would call the MNTA fund raise a registered direct since the shares are registered and immediately tradeable.

A PIPE transaction indeed is a "private investment in a public equity" and are shares that need to be registered, which typically takes a few months.

http://www.altassets.com/private-equity-knowledge-bank/learning-curve/article/nz2856.html

I would tend to disagree with a couple of your points however. There's no way to know if the mnta buyers are long term, short covering or intend to flip. Most likely some combination unless it's existing long term holders.

Regarding PIPE investors not being serious, it's easier said than done shorting a substantial amount of fairly illiquid stock. I would tend to think PIPE investors are more long term oriented than registered direct buyers however a lot of funds won't invest in PIPE's based on issues with illiquidity and effectively being locked up for a few months.

In any case there's no one size fits all way to characterize investors in these transactions.