Private Profits Training Module 4: How do you sell private placements?
October 21th, 2019
In my previous update, I told you how to buy shares through private placement deals.
I explained how you’ll need to fill out the forms and either execute a wire transfer or actually write out a check and send it into the company.
You’ll then receive a stock certificate in the mail, and along with it, some paperwork you’ll need to submit to a live broker.
Sometimes the company will recommend a broker to use for this. But sometimes it won’t.
So it’s good to have a broker you can reach out to just in case.
That live broker will then deposit the shares, as specified in that certificate, into your account.
So then how do you sell your shares?
Depending on the stock, there’s usually a lock-up period on the shares, typically ranging from four to six months.
You can’t sell any of your shares during the lock-up period. You have to wait for it to expire.
If the stock isn’t trading publicly yet, then you have to wait for the IPO, at which point the lockup period begins.
Then, once the lock-up period expires, there’s another potential speed bump in the road.
If you’re a U.S. investor and the stock in question is, say, based in Canada, there’s something called a 904 Restrictive Legend that will need to be dealt with.
This Restrictive Legend comes into play when U.S. investors become involved with foreign stocks.
The bottom line with the restriction is that it has to be removed before the shares can be sold.
This can take anywhere from a few days to several weeks to happen. Your broker will walk you through the process and notify you when the restriction is gone.
Once it is gone, then you can sell your shares on the open market.
As I mentioned before, the process here is different than buying stocks on the open market. It takes a bit more work, but the results are well worth it.
In our next module, I’ll reveal what kinds of gains you can expect to bank from these unique investments.
Sincerely,
Alex Koyfman
Founder, Private Profits Summit
