Nick Hodge,
Publisher
June 19, 2024
When I first got into the investment game over 15 years ago, I had little idea about private deals.
I thought everyone had to buy a stock the same way, through a broker via the bid/ask market.
But I quickly learned…
There’s a small set of investors — of which you can become a part — who get to buy stock at a discount to others. And these private discounted deals come with other perks as well.
It’s not shady or illegal. Hundreds of billions of dollars are raised in these so-called “Exempt Market” deals. And the tiniest of companies do them as well as the jumbo market caps. Bicycle Therapeutics, a billion-dollar biotech company, raised $555 million in a private offering this year, for example.
These deals can be extremely lucrative for the small group of investors who get to participate in them. Let me explain…
The Art of the Private Deal
Instead of raising capital in the public market via an offering of common shares, a company can choose to do a private placement, which exempts it from registration and prospectus requirements.
This avoids long delays and higher costs, and allows the company to raise money faster. So for the investor, it’s more like a venture or risk capital deal.
As such, the returns can be extremely outsized. But because there is no prospectus, and especially if the company is young or not generating revenue (as is the case with many biotech and mining companies), there is more risk.
That’s why these private placements are often conducted at a discount to market price. And in addition to just shares, many private placements also come with warrants that give the investor additional leverage for taking on increased risk. Warrants are like options in that they allow you to buy more stock in the future at a specified price.
But because of the risk involved, the government decided long ago that only “Accredited Investors” can partake in these deals. That typically means:
- Individuals (alone or with a spouse) with net financial assets over $1 million or with net assets of at least $5 million;
- Individuals whose net income before taxes exceeds $200,000 (or $300,000 with a spouse) in each of the past two calendar years and who reasonably expect to maintain that income level.
And even if you are accredited, the hardest part can be getting access to these deals. They are usually reserved for friends and family of the company and its management and directors, or for institutions.
But when you’ve been in the business as long as I have, you are considered friends and family by many people in the industry.
In other words, my reputation and network — and Gerardo’s, too — has grown to a point where I’m able to get you access to these types of private deals.
That’s precisely what we do in Private Placement Intel, our elite private placement advisory service. You can view our free webinar on private placements here.
Case Study
Since 2015, I have recommended 192 private placements that members have put anywhere from $50,000 to $2,000,000 in as a combined group.
We have closed 106 of them for cumulative returns of 19,945%. That means each closed winner has averaged 107%.
That is not a typo. My CPA still wonders how I do it.
And that total does not include several positions that still open with large percentage gains. We go through some of those examples in this webinar.
I will give you just one example, as this is highly strategic information that is reserved only for members of Private Placement Intel.
Back in 2017, we financed URZ Energy, a uranium developer, at $0.30 while it was still private, anticipating a new uranium bull market. In 2018, URZ Energy was taken out by Azarga Uranium in an all-share deal that valued it at ~$0.55 per share, putting us up 83%. In 2021, Azarga was taken out by enCore Energy (NASDAQ: EU) for $0.71 per share, putting us up 136%. enCore then consolidated its shares 2-to-1, listed on the Nasdaq, and has become the newest US producer of uranium. Its shares have climbed to nearly $7, putting us up more than 1,000% on that original position.
Like I said, we’ve done nearly 200 of these things in the past decade and closed over 100 of them with the average closed winner being over a 100% return on your money. In other words, we have, on average, doubled our money ten times per year for the past decade.
You can imagine my accountant’s bewilderment.
In fact, I have one lined up right now that could prove to be the most lucrative yet. It’s a small copper and gold miner with a world-class asset in Peru. We cover the opportunity in this free webinar.
We think it will double in the next year and will work for you for free for a year if it doesn’t.
Again, these deals are risky. They are for accredited investors.
But if you fit the bill, the only missing piece is access. And that’s what we provide.
This current private deal in which we’re participating closes this week. You can get access now.
We average about one deal per month, on average, so there will be another one shortly.
See how we vet them and how you can join us here.
Call it like you see it,
Nick Hodge
Publisher, Daily Profit Cycle