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Advantages Of Going Public Through A Reverse Merger
Dynasty Resources is your Gateway to business in China. Through partnerships with top companies, each specializing in a unique area of China business, Dynasty provides quality services that help you enter the most exciting market on earth.
Many firms opt for the reverse merger, whereby a private company's shareholders gain control of a public company by merging it in with their private company. The private company shareholders receive a substantial majority of the shares of the public company (normally 85% to 90% or more) and control of the board of directors. The transaction can be accomplished in as little as two weeks, resulting in the private company becoming a public company.
Advantages of Going Public through a Reverse Merger
Increased Valuation: Typically publicly traded companies enjoy substantially higher valuations than private companies.
Capital Formation: Raising capital is usually easier because of the added liquidity for the investors, and it often takes less time and expense to complete an offering.
Acquisitions: Making acquisitions with public stock is often easier and less ...
... expensive.
Incentives: Stock options or stock incentives can be useful in attracting management and retaining valuable employees.
Financial Planning: Public company stock is often easier to use in estate planning for the principals. Public stock can provide a long term exit strategy for the founders.
Reduced Costs: The costs are significantly less than the costs required for an initial public offering.
Reduced Time: The time frame requisite to securing public listing is considerably less than that for an IPO.
Reduced Risk: Additional risk is involved in an IPO in that the IPO may be withdrawn due to an unstable market condition even after most of the upfront costs have been expended.
Reduced Management Time: Traditional IPOs generally require greater attention from senior management.
Reduced Business Requirements: While an IPO requires a relatively long and stable earnings history, the lack of an earnings history does not normally keep a privately held company from completing a reverse merger.
Reduced Dilution: There is less dilution of ownership control, compared to a traditional IPO.
Reduced Underwriter Requirements: No underwriter is needed: (a significant factor to consider given the difficulty companies face in attracting an investment banking firm to commit to an offering.)
The China corporate finance, Our partners are members of the New York Stock Exchange, the American Stock Exchange, the Archipelago Exchange and the Securities Investor Protection Corporation (SIPC). Please visit online http://www.dynastyresources.net in NewYork city.
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