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Public
Shell Reverse Merger - A viable alternative to going public
Public
shell reverse merger transactions are a widely accepted, alternative mean for
a private company to go public. A necessary component to a completed reverse merger
transaction is the public shell. The public shell is a publicly listed company
with no assets or liabilities. It is called a "shell" considering all that exists
of the original company is its corporate shell structure. By merging into such
an entity, a private company becomes public.
The primary benefits of doing
a public shell reverse merger, as opposed to an IPO, is the following:
- You will receive a higher valuation for your company.
- The company
does not require an underwriter.
- The costs are significantly less than the
costs required for an initial public offering.
- The time required is considerably
less than for an IPO.
- IPOs generally require greater attention from top management.
- There is less dilution of ownership control.
- While an IPO requires a relatively
long and stable earning history, the lack of an earning history does not normally
keep a privately-held company from completing a reverse merger.
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