Markets
Broken PIPEs

As Balance Returns to Growth EPP Market, Traditional Unregistered PIPE Banks MIA

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Five years ago, in the hey-day of the hedge fund-dominated PIPE market, micro- and small-cap market placement agents competed furiously for equity private placement (EPP) business wherever they could find it. While they might be stronger in one sector over others, none of the active banking firms shied from deals in unfamiliar industries – they were seen as growth opportunities. The same held true of issuance structures. Different banks had different strengths but few ever passed on a deal due to the issuer’s structural preferences, and most offered the full palette of structural options to issuers that could command them. The only significant structural specialization developed around equity lines of credit, and to a lesser extent, alternative public offerings (APOs).

Markets

Old, New Players Drive April EPP Market

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A recent flurry of growth equity deals highlights the mix of old and new investors that currently comprises the equity private placement (EPP) market. Relative newcomers Sabby Management and Aspire Capital Partners have invested in 16 deals (including structured equity lines) this year, five in the last two weeks in April. And while some many pioneers like Laurus Capital Management, NIR Group and Yorkville Advisors have left the market, old hands like Deerfield Management, Iroquois Capital and Downsview Capital continue to invest in private placements from a wide range of issuers. In the last two weeks of April, some 46 EPPs raised $984 million, including four ATM transactions which did not disclose proceeds. While common stock deals such as ATMs and CMPO have dominated the PIPE market, the recent flurry of deals included ten fixed-price convertible debt or convertible preferred offerings.

Markets

Iroquois Gets Active with Gale Force Petroleum

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Gale Force Petroleum (GFPMF), a Canadian energy explorer, has elicited an activist investor effort from longtime PIPE market investor Iroquois Capital. On April 25, Iroquois sent a letter to the Gale Force board of directors and criticized its performance and its credentials for managing an oil company. "In today's letter to the Board, Iroquois outlines its serious concerns regarding the Company's abysmal underperformance under the stewardship of the current Board and management, including the severe mismanagement of Gale Force's otherwise valuable assets," Iroquois said. According to Iroquois' letter, the hedge fund owns 7.6% of Gale Force's stock. "We believe the Company lags behind its peers in nearly every relevant metric, leaving Gale Force as an underperformer in the marketplace," the letter said.

Markets
Michael Vasinkevich

Former Rodman Exec Vasinkevich Revs Up H.C. Wainwright

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A pair of April registered direct offerings placed by a retooled H.C. Wainwright & Co. marked the return of former Rodman & Renshaw principal Michael Vasinkevich to the PIPE market. Wainwright served as lead agent for a $3.17 million offering from Wave Systems Corp. (WAVX) and as exclusive agent for a $10 million offering from Northwest Biotherapeutics (NWBO). In addition to Vasinkevich, FINRA records show, principals of the resurrected Wainwright include former Rodman executives Vincent Sarnatora and Mark Viklund, along with former Digital Lightwave (DIGL) chief exec and Scientologist Bryan Zwan.