private placement

Meaning

1. 1nouncountablefinance

   A sale of shares or bonds to a small group of selected investors instead of through a public offering open to everyone.

   Grammar: Countable: the firm completed a private placement; used with by or through: raise money through a private placement.

   Patterns

   • a private placement of something
   • raise money through a private placement

   The startup raised ten million dollars through a private placement with three venture funds.

   A private placement is faster than going public because there are fewer rules to follow.

   The company's bonds were sold in a private placement to pension funds.

Word forms

Common combinations

complete a private placement

The firm hopes to complete a private placement by June.

private placement memorandum

Investors read the private placement memorandum before signing.

private placement of shares

A private placement of shares funded the expansion.

through a private placement

The bank raised capital through a private placement.

Synonyms and how they differ

private offering

It means almost the same thing and is more common in legal documents, while private placement is the usual market phrase.

direct placement

It stresses that securities are sold straight to buyers without a broker, which is a narrower focus than private placement.

initial public offering

It is the opposite route, selling to the public, so it is a contrast to private placement rather than a synonym.

Opposites

Word family

place verb

to sell securities to investors

placement noun

the act of placing securities

private equity noun

investment in companies not listed on a stock exchange

Commonly confused: private placement or public offering?

Practice

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