how i can know that reverse merger is making profit for a company's shares ?
Just click on the blue links below:
Invest FAQ: Stocks: Reverse Mergers
The acquisition of a public company by a private company, allowing the private company to bypass the usually ...
www.investorwords.com/5772/reverse_merger.html - 22k
reverse merger Definition
Reverse takeover - Wikipedia, the free encyclopedia
Unfortunately you (and the rest of the shareholders, and the company itself) won't know until time has passed. While mergers usually in the end benefit shareholders, whether or not they do will depend on a number of factors including how well the new entity performs, how well the combined entities work together, and how well management is able to successfully utilize the strengths of and manage the combined entity.
I want to take my small company public via reverse merger on the OTC. Is that a good idea or bad idea?
Unless you are crazy or your business is extremely capital intensive and generating significant net income you do not want to go public. I know it sounds nice, but you should exhaust ALL other sources of capital first. In addition, if you are not very profitable now you almost certainly wont be after you comply with all the regulations placed on public companies. Do you really want to give up control?
The reverse merger is considered completed when the pre-public company owns controlling interest in the public shell, so once you own more than 50% of the shares, the merger has been closed.
Doing this in steps, rather than buying 100% of the company, is risky. The risk is that the shell could decide not to sell all the shares and retain a minority stake in your business. Since your company is the on-going concern, the shell company would get something for nothing...at your expense.
Yes. Really a reverse takeover as a merger implies tow companies on equal footing. Basically a reverse takeover is a smaller quoted company being taken over by a larger private company. In order to get the quote and the shareholder list. Your questionis not that clear but I hope I have answered it. If not see Q&A http://www.shareworld.co.uk
If a pink sheet company does a reverse merger to the OTC, what are the disadvantages to current share holders?
Um...ok, I'm pretty knowledgeable about this stuff, but I don't know what a 'reverse merger' is in this context. Normally this term is used when a private company merges with a public one. But a pink sheet company isn't private, so I assume you mean that they will get the OTC listing from the dormant public shell company. Which company's shareholders are you concerned about? Because, in any merger, there are two companies involved. In itself, there's nothing patently wrong with it, and getting the listing would normally be a good sign, if it's the right kind of listing. But are we talking NASDAQ listing or just OTC? I mean, OTC could still be Pink Sheets, right? So it may not be beneficial. I guess you really need to clarify some of this before I try to make sense out of it. Which company do you own shares in? What type of OTC listing are they getting? etc.
In order to go public through a reverse merger, the public company must already be registered. The private company could buy the shares of a public shell that has liabilities, but if they do, they take on those liabilities. For most reverse mergers, the on-going private company buys a shell that has already had any liabilities discharged in bankruptcy.
If you know something about a stock (planned reverse merger) before you invest is this considered insider trdi?
If the information has not been released to the public it would be considered insider info.
If I was interested in a company having a reverse split I would short the stock. Statistically, most stocks that reverse split go down in price after the reverse split. Generally stocks that reverse split are under $5..... usually after going down by a large percentage. So these stocks... continue to go down after the split.
Rarely is a reverse split considered good.
What are the differences between IPO and reverse merger to existing shell?
The reverse merger into an existing shell is much faster, as your existing business essentially acquired a non-active company that has already completed all the SEC documents. Of course, you do pay a substantial premium to do the reverse merger into the shell.
A company I founded looked into this option, and we found that the typical shell would have cost us something like $350,000, and in addition, the people who founded the shell would keep roughly 7-10% of the stock in the newly-merged business.
Once you have acquired the shell, through a reverse merger, the business is still required to have full transparency, full disclosure of its books and financial records, etc., as it is you now are operating under SEC rules.
The major benefit is that the shell process is much faster, and there is less paperwork to do up front (someone else already did that for you.)
Note that when you do a reverse merger into the shell, you are SEC listed, but you haven't raised money through the IPO yet. You still have to do that, and that involves a lot of paperwork.
For what it's worth, my company chose to go the IPO route.
You can do a search in the SEC Edgar database, in the full text search, searching for China, http://searchwww.sec.gov/EDGARFSClient/jsp/EDGAR_MainAccess.jsp .
I do not know of any other database that would give you a list of all Chinese reverse mergers. Even this list would not include stocks in the Pink Sheets.
In 2008, about one-third of all 192 reverse mergers involved a Chinese-based company.
This is remarkable for several reasons. There are many difficulties in completing
Chinese reverse mergers, including (1) complex Chinese government regulation of
foreign investment, (2) the language barrier, (3) the Chinese love for secrecy in business
dealing, (4) the difficulties in getting audited financial statements or even any financial
statements in U.S. formats, (5) investor suspicion of foreign entities.
However, the boom in Chinese deals has been fueled by investors who realize the
growth potential of the huge and booming Chinese economy.
In the last year I worked on over 10 small Chinese reverse mergers.
When investing in Chinese reverse merger companies, you must be aware that not
everything might be as it is presented.
Further, the general consensus is that you cannot sue a Chinese company in China. On more than
one occasion I know, the Chinese company, after a successful reverse merger and financing just simply backed out of the deal.
So the bottom line for our purposes is that there can be a large amount of excitement and
a greater amount of risk for Chinese deals.