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The Stockhouse DealRoom: Private Placements Made Easy

Stockhouse Editorial
1 Comment| May 2, 2019

For many years, Stockhouse has been providing North American investors with one of the largest forums for small-cap investors: the Stockhouse BullBoards. With over 1 million unique visitors per month, Stockhouse is already Canada’s #1 financial portal.

Stockhouse is also very active in publicizing these small cap corporations. These are the companies that are responsible for creating many of the most-promising new ideas and products in our economies. Small Business is also the economy’s primary job-creator. Through Stockhouse’s publications and investor forum, we assist investors with their due diligence in identifying the most prospective investment opportunities.

As junior corporations, most of these companies also need to raise capital, on at least a semi-regular basis. Typically, this occurs through private placements. Such offerings provide investors with access to large blocks of shares, at a fixed offering price.

Click to enlarge
(Chicago, Burlington & Quincy Railroad Stock Certificate 1887)

In addition, these financings generally include a bonus to entice investors into participating: share purchase warrants. Warrants provide their holders with the option to acquire additional shares, at a fixed price, for a pre-established period of time.

An important factor of which investors need to be cognizant is the “holding period” that accompanies investing in a private placement. The holding period is the length of time for which the investor is legally required to retain ownership of these shares before being allowed to sell or otherwise dispose of their legal interest. Four months is the typical holding period for a private placement.

If a company prospers following a private placement and enjoys a rising share price, it will often see additional capital inflows as investors who participated in the private placement choose to exercise their warrants. When investors see a company’s share count expressed in “fully diluted” terms, this indicates the potential share count for that company should all warrants (and options) get exercised.

The goal of Stockhouse has always been to help small-cap investors achieve greater success in their investment activities. The Stockhouse DealRoom makes it easier for the Stockhouse Community to participate in these public offerings. We streamline the accreditation process for both investors and companies alike.

In the past, such accreditation has often been a painful process, frustrating investors and eating up large amounts of time and energy for the pub co’s seeking to raise capital. By saving time, the DealRoom allows investors to spend more of their precious time on due diligence and allows companies to devote more of their energies to operations.

The investing climate for small-cap investors has been challenging in recent years, meaning that investors are having to work harder (and smarter) to earn their returns. Private placements can be an important vehicle to allow participating investors to significantly enhance their overall returns. And the Stockhouse DealRoom is your vehicle to make the private placement process faster and easier.


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