Everything you need to know about Reverse Shell Mergers by Ralph Amato
PIPE investors have funded APO’s because they get to buy stock at a discount to the projected public market value of a company. Additionally they know that because the company completed a reverse merger and is now public there is a guaranteed exit strategy. Many tier 1 hedge funds are active [...]
What differentiates an APO from a reverse merger is the simultaneous PIPE raise. A PIPE is when a publicly traded company sells its stock to investors in a privately negotiated transaction. The stock is normally sold at a discount to current market value and investors are normally acquiring unregistered “restricted” [...]
PIPE Transactions
Historically, companies that were funded through a PIPE would register the shares so they would become freely tradable. The company would usually keep the registration statement effective until either the shares that were registered were sold or until such time as the shareholders could sell their shares without any restrictions under Rule 144.
There are [...]
While in Manhattan I spoke with several investment bankers and SEC attorneys about the future of reverse mergers and PIPE’s. Considering the plight of the economy and the swings in the financial markets the general consensus was remarkably positive. Reverse mergers have become increasing global over the last three years and they are now starting [...]
PIPES in 2007
Rodman and Renshaw, LLC was ranked numero uno (#1) for the most active investment bank while Enable Capital Management ranked as the number one most active institutional investor in the PIPE market in 2007.
From Sagient Research comes the following information for the PIPE market for 2007:
Sichenzia Ross Friedman Ference, LLP ranked as [...]
By DealFlow Media – www.dealflowmedia.com
The Securities and Exchange Commission published the final draft of changes it’s making to Rules 144 and 145 of the Securities Act of 1933 on Dec. 6. The rule changes, which deal partly with requirements for holders of restricted stock, have been under discussion since last spring at the SEC and [...]
The 2007 PIPE’s conference, held last week in New York, was attended by major players in the rapidly evolving reverse merger marketplace. Over the past year the reverse merger segment of the financial services industry has emerged as the defacto IPO marketplace for emerging growth companies and has gained credibility with the SEC. [...]
Have you considered the pricing of the shares for your PIPE financing?
As I mentioned in my previous Blog we will now look at two scenarios for pricing a company’s stock in preparation of an impending PIPE financing.
OTCBB Stock Priced at $5.00 a Share
First let’s assume that your company valuation is $20 million. The CEO [...]
Have you determined the pricing range of the shares of the shell?
Many CEO’s have unrealistic perceptions of the value of their company. They vision their stock being worth substantially more than its true inherent market value. The best way to value your company is to research market pricing and PE ratios of comparable [...]
9. Are you planning on raising a round of financing through a PIPE transaction?
One of most difficult parts of the going public through a reverse merger process is the capital raise. Many of today’s shell financings are done through what is commonly referred to as a PIPE – Private Investment in Public Equity. [...]
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