Private or closely-held stocks are shares of stock in a private corporation and are typically offered to pre-qualified individuals. These are not available to the public on the open market. These offerings must comply with both federal and state securities “blue sky” laws in which the offering is made, and the number of individuals included in the offering cannot exceed the maximum stipulated by state law.
Millennium Trust does not recommend any particular investment or asset category. Investors are urged to speak with a tax or investment advisor before investing.
These offerings, usually made by corporations seeking capitalization, can be offered in any class of stock described in their prospectus. Many corporations act as their own registrar as well as transfer agent and they may or may not use underwriters, brokerage firms or market makers for their offerings. A private stock offering is generally outlined in a private placement memorandum (or PPM) or a stock purchase agreement, and potential investors should study the offering materials closely.