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Reverse Mergers RSS Feed

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Created
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Moderator BamaDreamer
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REVERSE MERGERS
+
Shell Stocks, "Q's", Due Diligence Discussion, Long Term Positions, Senior Bonds, Preferreds
est. 2002

 

What is a Reverse Merger?

Using the simplest form of analogy, a reverse merger is like a guppy swallowing a whale.  After the guppy digests the whale, it still looks like a guppy on the outside, but is now a whale on the inside.  In corporate terms, this is accomplished through the purchase and/or exchange of equity securities.  The following illustrate the basic premise of a reverse merger transaction: 
\


 




  A private operating company (the whale) wishes to go public via a reverse merger.  The private company is owned by its original founders and has ongoing business operations.

PRIVATE COMPANY


3 shareholders (original founders)
Has assets, liabilities, revenues and ongoing operations
Desires to be publicly traded


 
l  

 

After developing a strategic plan for a reverse merger, the private company identifies a suitable public shell company (the guppy) with no assets, liabilities or ongoing business operations. 




 







  


PUBLIC SHELL COMPANY

150 shareholders

 $0 assets, $0 liabilities and no ongoing operations*
 Looking for suitable business with ongoing operations

  

 After developing a strategic plan for a reverse merger, the private company (the whale) targets the public shell company (the guppy) with no assets, liabilities or ongoing business operations. 

          "Hey Guppy, I can trade publicly if you eat me whole!"        "OK!!! I'm empty at the moment anyway!" 
 
 
After completing the exchanges of stock ownership, the two companies become one which is still publicly traded.  The private company's owners gain control the new public company which operates the same business they originally founded. 

 

REVERSE MERGER COMPLETE AND A NEW PUBLICLY TRADED COMPANY

153 shareholders =  3 shareholders from the private company(original founders as management) + 150 shareholders (shell shareowners)
Has assets, liabilities, revenues and ongoing operations
And trades on an exchange



FEATURED OPPORTUNITIES

Please Do Not Make Financial Investment Decisions Based On Information Found Here


 
PFOB Performing Brands    http://investorshub.advfn.com/boards/board.aspx?board_id=3787 
Shell Stock Purchased free and clear of liens and emcumbances in November by creditor Merge Beverages FKA Holigan Racing (CEO Michael Holigan) for 30K. Order was signed November 17, 2010 in THE UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION 

AICPQ  Capital Trust 9% Pfd http://investorshub.advfn.com/boards/board.aspx?board_id=15708 
The Bankruptcy Trustee now has control of the business and will be responsible for monetizing the remaining assets and paying off claimants, of which AICPQ holders are owed the largest amount.



BOARD RULES
 
1) Official filing links are the best way to promote your shell stock or RM on the reverse merger board.
2) Only post shell stocks here with fresh reverse merger activity developing.
3) Post supporting evidence with your reverse merger submittions. (Chart activity, rumored RM talk, and phone conversations with a new shell owner DOES NOT count as legitimate DD and the post will be deleted as spam)
4) Be respectful.   

 
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