Stock placements

A placing is an issue of new stock that does not seek applications directly from the public. Instead, the investment banker or issuing house looks for clients, such as wealthy individuals and financial institutions, who are willing to purchase large numbers of the new shares at a fixed price.

This issuing method is less expensive than a public offering and has less onerous regulatory and documentation requirements (for example, a formal prospectus typically does not have to be issued). A placing also gives a company more discretion to choose its investors, but has a downside in that there is often less liquidity in the shares due to the narrower shareholder base.