For an issuer that has an effective shelf registration statement and is contemplating a follow-on offering, or an issuer that has a resale registration statement that is effective and selling stockholders eager to sell, a registered direct offering remains an important financing alternative. The marketing of a registered direct offering is targeted, much like the process undertaken in connection with a PIPE transaction, but given that the securities sold in a registered direct offering are freely transferable, it has certain advantages when compared to PIPE transactions. In recent months, a number of energy companies that have undertaken follow-on offerings have structured these as registered direct offerings. Usually, there are a limited number of institutional investors that participate in the offering. Of course, there is no limit on the type of investor that may participate. Morrison & Foerster’s Anna Pinedo discusses the basics of registered direct offerings in this ThinkingCapMarkets podcast.
Our recently updated FAQs can be accessed here: Frequently Asked Questions about Registered Direct Offerings.