Under Rule 144A, who can Joe sell his unregistered stock to?

Rule 144A provides a safe harbor for the resale of certain types of securities that are not registered with the SEC, specifically targeting sales to Qualified Institutional Buyers (QIBs). A QIB is defined as an institution that owns and invests on a discretionary basis at least $100 million in securities. This rule streamlines the process for institutions to trade unregistered securities, facilitating liquidity in the market.

By targeting QIBs, Rule 144A allows for a more efficient secondary market for these unregistered stocks, as it limits potential buyers to experienced and sophisticated entities capable of understanding and managing the associated risks. This focus on institutional rather than retail investors is significant, as retail investors may lack the resources and experience to properly analyze such products.

In contrast, the other options do not align with the stipulations of Rule 144A. Retail investors and public companies do not fall within the QIB classification, limiting their eligibility for purchasing unregistered stock under this rule. Additionally, while accredited investors may have the financial capacity to engage in private placements, Rule 144A specifically emphasizes the role of QIBs rather than including all accredited investors.