Hi ,
When it comes to resource investing small bets can turn into meaningful returns, but best investors rarely buy shares on the stock market, they invest through private placements.
Private Placements… What are They?
A private placement is when an investor buys new shares directly from a company, as opposed to buying them from another investor on a stock exch ange.
Thes e opportunities are not usually available to the general public, and the best private placement "deals" tend to be exclusive, with more demand for shar es than are available. The investors that get first dibs on this stock tend to b e well connected or well known.
Ther e are two types of private placement investments common in the mining indus try:
- Private Investment in Public Equities (PIPEs); and
- Private Equity Investments.
PIPEs
Private Investments into Public Equities (PIPE), are where investors buy newly issued shares directly from a publicly listed company.
The money goes directly to the company, which can then be used to fund work that should increase shareholder value.
Because investors are buying the stock directly from the company and not from a stock exchange (like the TSX or NYSE), the company is able to sweet en the terms of the deal to incentivize investors.
This t ypically takes the form of:
- Selling stock at a discount to the current market price;
- Adding warrants; or
- Sometimes both.
A warrant is essentially a stock option that is issued directly to investors from the company. Warrants will have a strike price at which you can buy the shares and an expiration date that you must execute your purchase before.
Private Equity Investments
Private equity is a type of investment where individuals own a portion of a company that is not publicly owned, quoted, or traded on a public stock exchange. The main types of private equity investment strategies are leveraged buyouts, venture capital, and growth capital injections.
At Resource Insider we are focused on covering venture and growth capital companies.
A venture capital investment involves taking an equity stake in an early stage private company that is not yet profitable, but it has high growth potential.
A growth capital investment entails taking a minority stake in a relatively mature company that is looking for capital to expand or restructure their operations. These types of businesses are more mature than venture capital investments, but do not generate enough cash flow to fund their own expansion.
Private investments can be done at any price the company and investors agree upon and can also include warrants.
Benefits of Private Investing
Due to the illiquid nature of private equity, share prices are not quoted often. This allows a company's value to hold steady in times of market volatil ity (like now), because all of the investors are committed to the long-term s trategic growth focus, and they cannot easily liquidate their equity stake.
Most im portantly, private investments often come with better terms than you will find on the open market. This is in essence a reward for investors for supporti ng the company early and accepting a higher degree of illiquidity.
In the m ining world investors participate in private deals of this nature because they believe that they are getting into a great "deal" at a better price tha n they could get on the stock market. Often these types of deals will be "r e-rated" when they list on an exchange, meaning that they go up in value, the reby rewarding early investors and providing them with liquidity (a chance to sell their stock at a profit).
How to Access Private Placements?
Many of t he wealthiest and most successful investors in the resource space have mad e their money largely from participating in private placements.
At Resour ce Insider, we leverage our technical and financial expertise and long-stan ding relationships in the natural resource sector to provide our members with exclusive research that allows them to access one of a kind natural re source deals.
I add outs ized gains to my own portfolio by investing with proven teams, into great asse ts, and benefiting from an opportunistic investment structure.
I personal ly invest my own money in every deal alongside our members.
The next opportunity is here.
Next Mond ay I have three deals to bring to Ri Members.
Each of th ese opportunities is accepting a finite amount of capital, as such we only ha ve room for 20 new members. We're offering a first come first serve sale.
If you're an accredited investor and wish to join Resource Insider, we'll be offering Me mberships for $1,499 starting Thursday June 8th until Saturday at 5pm (or un til 20 new members sign up). Whichever comes first.
We haven't had a sale at this price point since 2018, and we won't be again anytime soon. So if you've been eyeing membership and you want a deal, this is your chance.
I expect m emberships to sell out fast.
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