Benefits of the APO or Reverse Merger

Companies want to become public through an APO or reverse merger for several reasons.  The public shell company provides an established base of shareholders, usually somewhere between 50 to 100 individuals.  This enables the formerly private company that has reversed into the shell to qualify for listing on the OTCBB on an immediate basis.  To meet the shareholder requirements for NASDAQ or AMEX a company must have 400 and 300 respectively.  This number of shareholders can usually be attained over a period of time as the company starts trading under its new name and stock symbol.  A company that goes public through the traditional IPO process must sell its stock to a large number of shareholders in order to meet these requirements necessitating a broad marketing and endless roadshows.   This is a long and costly process.

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Other posts of the serie

  1. Alternative Public Offering – Part 1 - May 5, 2009
  2. Alternative Public Offering – Part 2 - May 6, 2009
  3. Alternative Public Offering – Part 3 - May 7, 2009
  4. Alternative Public Offering – Part 4 - May 8, 2009
  5. Alternative Public Offering – Part 5 - May 12, 2009
  6. Alternative Public Offering – Part 6 - May 13, 2009
  7. Alternative Public Offering – Part 7 - May 14, 2009
  8. Alternative Public Offering – Part 8 - May 15, 2009
  9. Alternative Public Offering – Part 9 - May 16, 2009
  10. Alternative Public Offering – Part 10 - May 18, 2009
  11. Alternative Public Offering – Part 11 (This post) - May 19, 2009
  12. Alternative Public Offering – Part 12 - May 20, 2009
  13. Alternative Public Offering – Part 13 - May 21, 2009
  14. Alternative Public Offering – Part 14 - May 22, 2009
  15. Alternative Public Offering – Part 15 - May 25, 2009
  16. Alternative Public Offering – Part 16 - May 26, 2009
  17. Alternative Public Offering – Part 17 - May 27, 2009
  18. Alternative Public Offering – Part 18 - May 28, 2009
  19. Alternative Public Offering – Part 19 - May 29, 2009
  20. Alternative Public Offering – Part 20 - May 30, 2009