Replies to post #669 on Asyst Technologies, Inc. (fka ASYTQ)

[trader53]

ASYTQ - Crossing Automation Reverse Merger – Alternative Process.???


The alternative process of becoming a publicly traded company is called a Reverse Merger. In this non-traditional method, the owners of the private company purchase a Shell Stock. Note that one significant difference between an IPO and a Reverse Merger is that when completing a Reverse Merger and becoming publicly traded, the private company has yet to receive any capital to expand their business. Usually, after the Reverse Merger is completed, the company raises the needed capital by selling restricted stock to a pre-arranged list of investors (sometimes referred to as a PIPE – Private Investment in Public Equity). The cost of purchasing a Shell Stock is much less expensive than completing a traditional IPO. Depending on the type of Shell Stock purchased, the cost can range from $50,000 - $1,000,000 for 70% to 95% of the outstanding stock. The time to complete a Reverse Merger may happen in a fraction of the time to complete an IPO, sometimes taking only 2 - 4 months. One other factor that makes a Reverse Merger an attractive means of going public is that the owners of the private company retain the entire decision making in the process.