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The Truth About Reverse Mergers
As I write this, very few, if any, initial public offerings for venture companies are being done. The IPO market is at a virtual standstill for companies looking to raise venture capital.
As the IPO market slowed, there has been a trend to more and more reverse mergers. As you may know, in a reverse merger, an operating company merges with a public shell or OTC shell to have publicly trading stock.
Generally, there are only two reasons to for going public, whether it is done with an IPO...
Advice for angel investors
As an angel investor or venture capital investor, you are always looking for the next big investment. In our current environment, as always, there are many deals looking for seed capital.
Most of us who qualify as accredited investors or qualified investors know, that most of these venture investments will fail. How do you choose the next big angel investment?
Here are a few things to look for:
You want people who are totally dedicated to their business, not those who are trying to make a...
The Rocket Ride Using Venture Financing for Unlimited Growth
A Rocket Ride is simply ultra-fast company development - from start up to $100 million valuation or more in one to two years.
The Rocket Ride achieves this in a set of integrated and seamless steps. You use techniques that individually are well known - seed money, venture capital, going public - but in the Rocket Ride are all part of one path to provide the fastest possible company development, not simply a botched mess of separate transactions with the partner who is most convenient at the...
New Technique for Going Public Instead of Doing a Reverse Merger with a Public Shell
It is important to note a little on the history of going public techniques. First, we had the initial public offering or IPO. A company, lets call it a venture company, seeking to raise money finds an underwriter for an IPO stock offering.
Then came the reverse merger or merger with an OTC shell. The company seeking money, the venture company, found a (hopefully) clean shell trading over the counter. The shell usually had no assets but had trading public stock. The venture company merged...
Aftermarket Performance for Your Reverse Merger
The main reason to do a reverse merger, or do a deal with a public shell, is to raise money. Usually, the idea is to get a high stock price and then sell stock privately based on the price of the public stock - a private investment in public equity or PIPE deal.
Unfortunately, whether or not the company does a PIPE deal, the stock performance of the new public company after a reverse merger with a public shell is often dismal. The usual reverse merger stock chart looks like a profile of a...
How to avoid problems in securities offerings
If you are going public, making an initial public offering with an IPO or a reverse merger, or perhaps raising money with a private placement memorandum, or writing a stock offering of any kind, you may be surprised to find just how useful this article will be.
This is written to provide the benefit of what I have learned over the years. It does not have all the answers but you may be surprised to find some very valuable and usable answers here.
Rule 1. Make money for the investors. I have...
How to Fix Your Toxic Debt or Death Spiral Financing
You have gotten through the audits, survived the filings and responses and clarifications. The symbol was issued. The money was raised, the value proposition understood, and everything seemed that it would be easy enough.
Who knew running a public company could take so much time and use up so much resource?
And then, seemingly out of nowhere, the stock price is down, no one seems to know where the selling is coming from, it just does not make sense. It has been costing so much more than...
Investing in Distressed Debt
Many sophisticated investors are now investing in distressed debt, including distressed real estate mortgages.
For example, John Paulson, who runs the $36 billion hedge fund firm Paulson & Co, is looking to buy distressed mortgages and distressed debt, despite being bearish on the overall economy, Bloomberg reported. Paulson wrote in a 2009 outlook to investors that he is interested in investing in debt restructurings, bankruptcies, strategic mergers and financial recoveries. Paulson's...
The Ideal Alternative Fuel
Whether or not it is done deliberately, it seems as though the huge swings in oil prices encourages us to put large amounts of money into alternative energy when the price of oil is up, only to see all these ventures fail when the price of oil swings down and makes them uneconomic.
We saw this happen in 1986 when the price sank to $10 per barrel and ethanol refineries were being given away by state governments that had taken them for unpaid taxes. We are seeing this now as the price plummeted...
Stocks Reduce Risk Yet Maximize Profits
by: John Lux
It is important to note that every smart investor wants to minimize risk while maximizing profit potential. Yet conventional investment theory tells us that in order to increase returns, you have to increase risk.
You may be surprised to find that this conventional wisdom is not always true.
When I was a professional stock trader, I made most of my profits from appreciation in my portfolio, not in short term trading. In other words, I was a position trader. Any losses in my...
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