A private placement is a private sale of unregistered securities by a public company to a select group of individuals or institutions.Because the securities sold in a private placement are not registered, they cannot be re-sold into the public market until a registration statement (Form S-1, SB-2, or S-3)has been filed and declared effective. To compensate for the inability to sell the securities immediately, private placement securities are often issued at a discount or are structured to provide the investors certain protections against decreases in the common stock price.