There are so many private placements now. Did I hear you say, “I have even bought some? Now read this. In Stock Market, Out of every ten private placements that come out, you can be sure that only two will get listed in Nigeria Stock Exchange eventually. Example is Global Re-insurance, Industrial and General Insurance, which came for private placement, promising to get listed soon only for them to fail to appear on the list of the Stock Exchange thereby tying down investors money. Therefore, my professional advice is that you should buy private placement only if:
1. You are sure of the time it will be listed on Stock Exchange
2. The company is a strong brand.
3. The fundamentals i.e. the financials, books of the company are properly kept and intact, most time it is usually easy to access this from the prospectus of the private placement of the company or straight down from the internet site, their website address.
4. You know the credit worthiness of the management the people on the board.
5. You know the prospects the company.
6. You know what they want to use it for, in the prospectus of the private placement given to you.
7. You know if the company owes any debt, it may be that they are rising the money to pay the debt they owe.
8. You know the registrar they are using for the private placement; there you would be able to get more information about the offer.
9. You know the outstanding number of shares in the private placement,. If it is large, it shows that as soon as possible since you have known the registrars to the offer you should try and get the certificate on time, clear it on time and sell on time.
10. Never buy a Private placement you don’t know what the company is doing.
These are simple rules, which if you comply with will never let you lose money in private placements.
Further Reading:
How To Make Millions When The Bull Returns
How To Participate In The Global Stock Market Trading
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