Private Investments in Public Equity (PIPEs) are becoming an increasingly popular funding vehicle for many companies, spanning from blue chip to micro-cap. But PIPE securities are restricted and cannot be valued based solely on the issuer’s trading price in the market. Theoretical models alone, such as Black-Scholes, are also insufficient.
While we can provide valuations of PIPE securities for any purpose, the most common uses of our services include helping:
- PIPE funds and other hedge funds that need their portfolios valued
- Public companies that need warrants valued so they can determine the Original Issue Discount for a convertible debt issue
- Companies that need fairness or solvency opinions for pending transactions
Within the PIPE space, and in the related markets for reverse mergers, Pluris values the following securities:
- Restricted Stock
- Warrants
- Convertible Notes
- Convertible Preferred Shares
- Units of Convertibles and Warrants
- Unit Purchase Options issued by SPACs
Because of its proprietary LiquiStat™ database of secondary market deals in PIPE securities, as well as its close affiliation with the professionals at SecondMarket, Pluris has become the valuation firm of choice for those who invest in or issue PIPEs, or for resolving disputes regarding damages suffered due to restrictions or liquidity constraints.
Representative Disputed Matters
- Stuckey v. Online Resources Corp – Pluris provided valuation analysis, an expert report, and testimony in depositions and at trial related to damages for failure to register a large block of restricted stock issued by a public company. Resulted in a verdict of more than $15 million of damages for our client. 2012
- [Confidential Settled Matter] – Pluris provided valuation analysis and an expert report in litigation between an investor and a public company for failure to deliver on certain anti-dilution provisions for warrants. Resulted in significant settlement for our client. 2013
- [Confidential Matter] – Pluris provided valuation analysis and an expert report in litigation between two hedge funds regarding the value of a portfolio of restricted stock, warrants, and convertibles. 2011
- [Confidential Arbitration Matter] – Pluris provided valuation analysis focused on the discount for lack of marketability (DLOM) applicable to a $30 million position in a public company. 2007