PIPE
ORG
PIPE
When a company goes the route of PIPE's, you can bet that it is in trouble, unable to raise funds through conventional routes. PIPE stands for private investment in public equity, and providing such financing can be very profitable, even if the companies later go bankrupt. PIPE deals usually allow the buyer to buy shares or securities convertible into shares at a price below the market price of the stock. In addition, the S.E.C. says, it is illegal insider trading to sell the shares short if the seller knows a PIPE deal is coming, but that fact has not been announced to the public.