TheGlobe.com Inc (TGLO)

[Toxic Avenger]

Because with an IPO the company transfers all its assets to an empty shell, the new company, then they sell a portion of ownership in that new company to outside investors at a valuation both parties agree on.

It's EXACTLY the reason companies do IPOs and for example, you didn't see DBX buy an inactive pinkie shell (Lord knows, there's plenty available) and RM into it. And no, it's not because Delfin's legal team is smarter than DBX's.

In Delfin's case, they'd have to put assets into the shell that they only own 71% of or convince outside investors that they should pony up a market cap of hundreds of millions or more for a shell without assets.

OR they could reverse split so that current ownership is less than 1% and do effectively an IPO. They'd be diluting their assets a bit (1%), they'd raise a lot more capital and give up a lot less.

As is plain, there is absolutely no advantage to the former and huge advantages to the latter. The only ones who lose in the 1% cram down are the current shareholders, excluding Delfin, because they can value the assets they contribute to the shell at whatever outside investors will accept, just as DBX did in it's IPO. And trust me, Delphin's concern is anyone who doesn't understand why companies go public.