![](https://investorshub.advfn.com/uicon/212417.png?cb=1469204376)
Sunday, July 24, 2011 3:01:23 PM
" Cross listing "
The How and Why: " Cross listing " can lead to increased stock liquidity and a decrease in a cost of capital. Cross listing of shares is when a firm lists its equity shares on one or more foreign stock exchange in addition to its domestic exchange Examples include: American Deposit Receipt (ADR) European Depositary Receipt (EDR), International Depositary Receipt (IDR) and Global Registered Shares (GRS).
(Study)...finding suggests that the stock market expects the cross-listing to have a positive impact on firm value.Doidge, Karolyi, and Stulz (2004) [5] show that companies with a cross-listing in the U.S. have a higher valuation than non-cross-listed corporations, especially for firms with high growth opportunities..."
A share issued and registered in multiple markets around the world. Global registered shares represent the same class of shares. Also known as a "global share".These shares are issued in the U.S. and registered in different countries, thereby making them foreign securities. They provide shareholders across the globe with equal corporate rights. Global registered shares should not be confused with American depositary receipt (ADRs) or Global depositary receipts (GDRs), which are domestic securities representing a foreign (outside the U.S.) interest.
The academic literature has identified a number of different arguments to cross-list abroad in addition to a listing on the domestic exchange. Roosenboom and van Dijk (2009)[1] distinguish between the following motivations:
Market segmentation
The traditional argument for why firms seek a cross-listing is that they expect to benefit from a lower cost of capital that arises because their shares become more accessible to global investors whose access would otherwise be restricted because of international investment barriers.
Market liquidity
Cross-listings on deeper and more liquid equity markets could lead to an increase in the liquidity of the stock and a decrease in the cost of capital.
Information disclosure
Cross-listing on a foreign market can reduce the cost of capital through an improvement of the firm’s information environment. Firms can use a cross-listing on markets with stringent disclosure requirements to signal their quality to outside investors and to provide improved information to potential customers and suppliers (for example, by adopting US GAAP). Also, cross-listings tend to be associated with increased media attention, greater analyst coverage, better analysts’ forecast accuracy, and higher quality of accounting information.
Investor protection ("bonding")
Recently, there is a growing academic literature on the so-called “bonding” argument. According to this view, cross-listing in the US acts as a bonding mechanism used by firms that are incorporated in a jurisdiction with poor investor protection and enforcement systems to commit themselves voluntarily to higher standards of corporate governance. In this way, firms attract investors who would otherwise be reluctant to invest.
Other motivations
Cross-listing may also be driven by product and labor market considerations (for example, to increase visibility with customers by broadening product identification), to facilitate foreign acquisitions, and to improve labor relations in foreign countries by introducing share and option plans for foreign employees.[2]
Authorized Shares Increase Possible Reasons:
The first reaction of many is the hated DILUTION scare.
But the Board of Directors may have other valid reasons to increase the Authorized number:
1.To use as collateral for capital financing, lines of credit &/or loan programs
2.To reserve shares for options/warrants.
3.To raise capital for expansion.
4.To expand the product line through acquisitions.
5.To establish strategic relationships with other companies.
6.To provide equity incentives to directors, officers, employees, consultants.
7.To create an employee stock ownership plan.
8.To protect the company from hostile takeover.
9.To use as a means of establishing subsidiaries based upon patents
10.To provide as restricted's for partners in JV programs.
11.To use for Cross-Listing shares on a foreign stock exchange that can lead to increased stock liquidity and a decrease in a cost of capital.
12.The most hated is used to scam investors in diluting for no other purpose than to fill the ceo's pockets.
$TYTN
DISCLAIMER it's your decision to BUY/SELL/SHORT/HOLD/WATCH a stock, do your own DD, know your risk.
Facts as Proof via Official News/Filings/LOI/Pacer's/Links/Pics/Corp Profiles & other sources
FEATURED Mawson Finland Provides Update on Exploration Activities at Rajapalot • Aug 21, 2024 9:06 AM
Unitronix Announces Strategic Entry into Cryptocurrency Space • UTRX • Aug 21, 2024 10:00 AM
Avant Technologies to Implement Robust Cybersecurity Measures for AI-Driven Healthcare Solutions • AVAI • Aug 21, 2024 8:00 AM
HealthLynked Corp. Announces Second Quarter and First Half 2024 Results: Continued Cost Reductions Set the Stage for Strategic Shift to App-Based Technology Services • HLYK • Aug 16, 2024 8:00 AM
PickleJar Announces Official Name Change and New Ticker Symbol • NREG • Aug 15, 2024 2:23 PM
VAYK's Q2 Profit Added to Accumulated Net Profit of Over $2.2 Million In 18 Months • VAYK • Aug 15, 2024 9:07 AM