Hi. I have a question for the Group. Sorry if this is too elementary.
I work for a hnw / institutional-like person purchasing restricted securities. This is his investment approach verses open market transactions.
The thought process is: why buy watered down, crappy equity securities or crappy preferred securites in the open Market, when you can get representation on the company's balance sheet, higher rate of return and better protection?
Yes, you give up liquidity, you are locked in for a term, you narrow the possiblity of repurchase agents, ect.
Where are we going wrong in this approach? Thanks for any insight!
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Your Post Isn't Exactly Clear
to me but the one word that comes to mind if I get what youre saying is LIQUIDITY.
We've all seen how important that is recently....
The problem with R144 is
The problem with R144 is liquidity. R144 requires a commitment of time and capital and that can be the biggest deterent to that kind of strategy, especially in this kind of market. Not just that, but unless you've ever tried to clear a restricted position unless you are a QIB, good f'ing luck.