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Why Would a Public Company Do a PIPE?

A PIPE is an alternative way for public companies to raise capital. Issuing a PIPE for cash has certain advantages over a secondary public offering.Among the most important of those advantages is that the time and expense needed to complete a PIPE is much less than that needed to complete a public offering.Often times the public company does not need to perform a road show and expend hours of management time in a PIPE.Especially over the past couple of years, as the markets have remained relatively closed to secondary financing,PIPEs have emerged as a stable and sustained source of equity capital for public companies of all sizes.

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