The Advantages Of Reverse Mergers

A reverse merger is a merge whereby a private company becomes a public company by acquiring it. Hence, it obtains a public company as an investment and transforms itself into a public company. Besides, the private company is saved from the expensive compliance and complicated process of becoming a public company. However, there is a different angle to the concept of a reverse merger. For instance, it is considered a reverse merger when a smaller company acquires a bigger one and not vice versa. Also, when a loss-making company receives a profit-making company, it is considered as a reverse merger. There are several benefits of reverse merging. Keep reading this post to understand why reverse merger is becoming a hot topic in the modern business world.

A Simplified Process

Reverse mergers enable a public company to become public minus raising capital, making if a considerably simplified process. Furthermore, conventional IPOs can take months to materialize, whereas reverse mergers take only a few weeks. Therefore, this will save management time and energy. Also, it ensures that there is sufficient time allotted to running the company.

Less Dependence on Market Conditions

Usually, the traditional IPO tend to combine both go-public and capital-raising functions. On the other hand, a reverse merger is exclusively a mechanism of converting a private company into a public entity. Besides, the process does not depend on the market conditions since the company is not into raising capital. Moreover, reverse merger acts as a conversion mechanism; hence the market conditions have a slight bearing on the offering. Additionally, the process is undertaken to realize the pros of being a public entity.

Benefits of a Public Company

Private companies with $100 million to several hundred million in revenue attract the prospect of going public. Therefore, the company's securities are traded on an exchange and enjoy greater liquidity. Furthermore, the original investors gain the ability to liquidate their entity, which provides a convenient exit alternative to have the company buy back their shares. The management can also issue additional stock over secondary offerings, making the company have greater access to capital markets. Hence, management has more diplomatic channels to pursue growth that include mergers and acquisitions. Sometimes, all that private entities require to become successful is reverse merger.

Public companies have opportunities to trade at higher multiples compared to private companies. Besides, the increased liquidity means that both institutional investors and the general public have access to the company's stock, which, in turn, can drive its price.  Additionally, as stewards of the acquiring company, they are eligible to use company stock as the currency to acquire target companies. Furthermore, since the public shares are more liquid, management can attract and retain employees through stock incentive plans.

Stock Market Fast Swings from Fastswings.com - October 29, 2009

Welcome to the October 29, 2009 edition of Stock Market Fast Swings from Fastswings.com.

Silicon Valley Blogger presents American Express Rewards Credit Card Offers A $25 Sign Up Bonus posted at The Digerati Life, saying, "Thanks!"

The Smarter Wallet presents How 0% Balance Transfer Credit Cards Can Save You Money posted at The Smarter Wallet, saying, "Thanks!"

Banker Saver presents On Bank Mergers and the Hostile Takeover posted at Banker Saver, saying, "Thanks!"

Investing Toolkit presents How The SIPC Protects Investors From Broker Bankruptcy posted at Investing Toolkit.

investment ideals

jim presents The Complete Idiot's Guide to Value Investing posted at Blueprint for Financial Prosperity.

The Investor presents Think you’ve spread your risk? Think again posted at Monevator.com, saying, "Assets like stocks, bonds, gold and commodities are more closely related than ever before. Why, and what does it mean for traders and investors?"

Darwin presents The Gold-Dollar Correlation Explained and Why it Broke Down posted at Darwin's Finance, saying, "With the daily gold price capturing headlines, it's worthwhile to understand how the decline of the US Dollar is correlated with gold and which investments are actually better suited to reflect this trend."

Engelbert Hudson presents The Definitive Oil ETF Guide (Five Minute Edition): Crude Oil ETFs posted at ETFdb.

Stacie Young presents 100 Best Blogs for Future Investors posted at Online Schools.

options

Joe Manausa, MBA presents How To Avoid Foreclosure posted at Tallahassee Real Estate Blog, saying, "The simplest option when faced with a foreclosure is to bring the loan current. Send the amount of money the bank requires to make the loan resume to current status. Pretty simple huh? I should have thought about that a long time ago… just make the payment… The fact is, most loans that are in foreclosure are due to families facing financial hardships that did not exist when the loan was made. They do not know how to “bring it current,” so they need other advice, and you might be surprised with the options they have."

Dan at Everydayfinance presents Stocks Gone Wild - Until Apple Covered Call Crashes the Party posted at Everyday Finance, saying, "With Apple shares doubling within the past few months, the author reflects on the highs and lows of selling covered calls against high flying stocks."

other

SpendOnLife.com presents Rodney Anderson Pioneers the Medical Debt Relief Act posted at SpendOnLife, saying, "New bill seeks to provide relief for those with settled medical debt collections in their credit history."

stocks

20smoney presents Should You Learn Technical Analysis Or Fundamental Analysis? posted at 20s Money, saying, "An examination at whether you should emphasize learning technical analysis or fundamental analysis when it comes to investing."

GeoffG presents Technical Analysis and Market Timing Update for 10/22/09 posted at Market Timing and Top Stock Picks, saying, "Stock market technical analysis, market timing signals, top stock picks, blog, forum, and more, all free."

Zach Scheidt presents AECOM Acquisition Lifts Stock posted at ZachStocks, saying, "AECOM Technology Corp. (ACM) acquired Ellerbe Becket over the weekend. Earnings from infrastructure, architecture, and project management should benefit patient shareholders."

tutorial

jim presents What is a Trailing Stop Loss Order? posted at Blueprint for Financial Prosperity.

That concludes this edition. Submit your blog article to the next edition of stock market fast swings from fastswings using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: stock market fast swings from fastswings, blog carnival.

Stock Market Fast Swings From Fastswings.com - August 20, 2009

Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor (Photo credit: Wikipedia)

Welcome to the August 20, 2009 edition of Stock Market Fast Swings from Fastswings.com. In this weeks edition we have an article by Ben on Earnings per Share Price to Earnings Ratio in addition to a very good article on Growth Stock Mutual Funds by James Williamson. The Silicon Valley Blogger wrote a Scottrade Review for those looking for an online brokerage account. Banker Saver submitted a very good article on Bank Mergers and the Hostile Takeover while MoneyNing compares Rental Property to REITs. Finally we have some stock analysis by Ray on SmartMoney 2009's Best Online Brokers and by Darwin with 14 High Yield Large Caps with Steady Dividends. Hope you enjoy the material.

Dave presents Brokerages to Limit Investment Choices - Vox posted at Cheapo Groovo.

KCLau presents Thoughtless Spending posted at KCLau's Money Tips, saying, "I was surfing the web recently and an article in Yahoo finance caught my attention. The article emphasizes the need to curb spending on the miscellaneous things in daily life."

Ben presents Stock Analysis: Earnings per Share Price to Earnings Ratio posted at Money Smart Life.

investment ideals

James Williamson presents Growth Stock Mutual Funds posted at Inside Mutual Funds, saying, "Despite being one of the best forms of investment available, mutual funds are a very confusing topic to many people. In this post we will take a look at growth stock mutual funds and explain the risks and benefits of investing in them."

James Williamson presents Best Green Mutual Funds: How To Invest in Green Technology posted at Inside Mutual Funds, saying, "Green Mutual Funds are a great way to invest in both an emerging technology and in an industry that is thriving and has huge potential for the future. This article explains what green mutual funds are and how they are good for both the planet and your portfolio."

Silicon Valley Blogger presents Scottrade Review: Top Brokerage For Small Investors posted at The Digerati Life, saying, "Thanks!"

Banker Saver presents On Bank Mergers and the Hostile Takeover posted at Banker Saver, saying, "discussion on bank mergers."

Investing Toolkit presents The Successful Stock Investor: Do You Have These Attributes? posted at Investing Toolkit, saying, "Thanks for hosting"

Jimmy Atkinson presents Do Leveraged ETFs Have a Place in Client Portfolios? | ETF Database posted at ETFdb.

other

Rohit presents Dump your savings account..! posted at eMoneyLog, saying, "Thoughts on how High Yield checking accounts have made savings account obsolete."

MoneyNing presents Rental Property vs REIT posted at Money Ning, saying, "Which is best? Getting a rental property or investing in REITs? Here we weigh in."

The Smarter Wallet presents How To Consolidate Debt: Ways To Reduce Your Debt Load posted at The Smarter Wallet, saying, "how to reduce your debt via debt consolidation."

Investing School presents Scottrade Promotion and Review posted at Investing School, saying, "Scottrade has been winning customers over with its amazing customer support. See what the stock broker offers."

Ray presents SmartMoney 2009's Best Online Brokers posted at Money Blue Book.

Patrick @ Cash Money Life presents Scottrade, OptionsHouse, and tradeMONSTER Review posted at Cash Money Life, saying, "Reviews of Scottrade, OptionsHouse, and tradeMONSTER, three of the top online discount brokerage firms."

Nesher presents Use Supercomputer to Buy and Sell Stocks with Profit posted at Internet Stock Trading for Beginners.

Steve Patterson presents South Beach Acai posted at Free Acai Berry, saying, "South Beach Acai reduces toxins in your system allowing you to live healthy and disease free."

Steve Patterson presents Amazing Revelations in Colon Health Revealed! posted at Diet Cleanse, saying, "Using ColoPure will revitalize your energy levels, allow you to lose weight and lessen water retention as well as flush away toxins from all the complex organ systems in your body."

stocks

Darwin presents 14 High Yield Large Caps with Steady Dividends posted at Darwin's Finance, saying, "A perfect list of large caps yielding over 5% with steady dividend histories."

Jae Jun presents AAPL Stock Valuation with Value Investing | Old School Value posted at Old School Value, saying, "Do you love Apple? Do you own the stock? Then find out what the intrinsic value of Apple (AAPL) is to a value investor."

Zach Scheidt presents Vegas Dodges A Bullet posted at ZachStocks, saying, "Las Vegas Sands Corp. (LVS) has amended its credit facility which increases the company's liquidity position. A potential IPO is in the works which would free up more capital."

That concludes this edition. Submit your blog article to the next edition of stock market fast swings from fastswings using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.
Technorati tags: stock market fast swings from fastswings, blog carnival.

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