|
Most investors are familiar with the traditional IPO (initial public offering) as a method for going public. Many people don't realize there are numerous other ways for private company to become publicly traded.
One widely used method is the "Reverse Merger", a simplified, fast-tack method by which a private company can become a Public Company.
This method for going public is more prevalent than most investors realize. One study estimates 53% of all companies going public in 1996 did so through the "Reverse Merger". The same study concluded about 30% of newly publicly listed companies got there through Reverse Mergers in 1999. Percentages dropped because Wall Street Investment Banking firms had a huge appetite for IPO's in the late 90s, and many marginal companies were able to find their way to the public market through traditional IPO's. We expect the Reverse Merger to make a come back in today's climate with very few IPO's being filed by Wall Street firms.
|