Mitesco Inc. (MITI)

[Stockingstuffer12]

I’m not sure if this is going to be a bought deal or best effort. But I was reading about high risk uplist/ IPO’s HF Hutton is going to ask for a lot of shares as a fee, per there cost and risk. And guess who those shares belong to? That is the price to pay to dance with the devil. Wall Street


In a bought deal, the underwriter purchases the entire IPO issue and then resells it to its clients, who may be primarily big institutional investors. The underwriter's compensation is the difference between the price the underwriter pays for the shares and the price it gets when it resells them. In this case, the underwriters bear the entire risk of selling the stock issue. They want to find buyers for the entire new issue rather than sitting on unsold shares.
In a best-effort deal, the underwriter may not purchase any of the IPO shares. It only makes a guarantee that it will make its "best efforts" to sell the issue to the investing public at the best price possible. Unlike a bought deal, there is no consequence for the underwriter if the entire issue is not sold. It is the issuing company that will be stuck with any unsold shares. Because there is less risk involved, the underwriter's gains are limited even if the issue sells well. In this case, the underwriter is compensated with a flat fee.