Going Public in the USA
Business Advice, North Central, North Coast, North East, North West, US Business Sunday, September 13th, 2009
There are several advantages of going public in the USA as compared to Canada. Each exchange has a variety of positive and negative features that allow the raising of capital and prestige of being on the markets. There are a number of ways of going public on the exchanges in the US but the simplest method is through a reverse merger. The reverse merger (or reverse IPO) allows a private company to purchase a shell (or the framework) of a public company.
How this is done is the shareholders of the private company will purchase control of the public shell company and then merge it with the private company. The publicly traded corporation is called a “shell” since all that exists of the original company is its organizational structure. The private company shareholders will then get a large majority of the shares of the public company. The remaining shares are then used to raise funds by selling to the public.
The cost of shells can range from $50,000 to $500,000 depending on what exchange the shell is on and how clean it is. The cleanliness of the shell is important as it will help speed up the process of being listed and trading.
The best way to understand each of the US exchanges is look at them as having a hierarchy of trading and reporting. The two major exchanges are the New York Stock Exchange, NYSE, and the NASDAQ exchange.
- New York Stock Exchange
- NASDAQ
- AMEX
- OTCBB
- Pink Sheets
A further explanation of each exchange including the benefits and drawbacks will be forthcoming.
By Anthony Leone of Corporate Profile International LLC
516-425-9120
For more information on going public visit us at www.corporateprofileinternational.com
Corporate Profile International LLC is a leading New York Investor Relations Firm representing publicly traded companies on the Pink Sheets, OTCBB and Nasdaq stock exchange.
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Posted by pcook
on 2:37 pm. Filed under Business Advice, North Central, North Coast, North East, North West, US Business.
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