Stripe, a global Fintech that is a huge e-commerce and payments player, has issued a post that retail investors should be careful about claims they can invest in their shares.
Stripe is a private company that may never go public. Today, due to excessive regulation and the associated cost of complying with a growing list of rules, many successful companies aim to stay private for as long as possible. Perhaps forever. Unfortunately, this means that smaller investors can be cut out of the wealth creation equation. Big money, on the other hand, continues to benefit from access to firms like Stripe.
Holding illiquid shares can be challenging for Stripe employees who may receive share grants as part of their remuneration package. Stripe has worked to alleviate this pressure by periodically launching employee tender offerings. Earlier this year, Stripe offered to buy shares from employees at a whopping $65 billion valuation. In 2023, Stripe raised money at a $50 billion valuation, so things appear to be going well at the firm and its shareholders.
Meanwhile, the lack of access to these shares apparently has led some bad actors to claim they are able to sell Stripe shares to smaller investors. Stripe explains:
“There is a long history of bad actors attempting to scam retail investors by offering fake and fraudulent opportunities to invest in prominent private technology companies. We encourage anyone who receives outreach from third parties offering them opportunities to invest in “pre-IPO Stripe shares,” “Stripe shares,” “Stripe stock,” or “Stripe equity” to exercise caution. If you believe you were the target of such outreach, consider contacting your local law enforcement, securities regulator, or if in the US, the SEC to report the matter.”
Now, if you are an accredited investor, you may still be able to access shares in Stripe as some platforms may offer participation in share offerings, and several platforms may be enabling secondary transactions as some employees may choose to sell their shares on a private marketplace.
Regardless, if you are purchasing shares of private securities, always work with a legitimate platform and understand the risk before you invest in any security.
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