A Few RM Conference Highlights
Greetings from warm and sunny San Francisco where DealFlow Media's Reverse Merger Conference is winding down. The conference was fabulous and included almost 350 attendees. Here are a few random tidbits I gleaned from some of the reports and panels:
1. Things are good and getting better, especially with the new SEC small public company proposals. We still await, however, the full rule proposal language, and are hopeful there will be additional good news when it is released.
2. There were 206 reverse mergers in 2006, a slight increase from the prior year and virtually tied with the number of IPOs.
3. The aggregate market value of reverse merged companies upon merger in 2006 was a staggering $8.4 billion!
4. There were 59 trading SPACs at the end of 2006.
5. In the first quarter of 2007, there were 53 reverse mergers with a huge $3 billion market cap - 100% higher than the prior year quarter!
6. In 2006 almost 50% of reverse mergers incorporated a contemporaneous financing or "alternative public offering" with a total raised of $850 million or an average of $9.4 million per deal.
7. Chinese transactions constituted 26% of all reverse mergers last year but the total value of those deals is about half of the value of all Chinese deals done in 2005.
8. The average IPO in 2006 raised $216 million, continuing to raise the bar for traditional IPOs.
9. A new study at the University of Pittsburgh showed, among other things, that 91% of companies are still in existence three years after their reverse merger. This contrasts with a previous study suggesting that amount was about half as large.
10. The Pitt study also showed that the median speed to complete a reverse merger was 51 days vs. an average of 111 days for a traditional IPO.
11. One should not write off London's AIM market as there may be certain advantages in certain situations for certain companies.
12. The new issue of The Reverse Merger Report released at the conference includes a full expose on footnote 32 shells, I urge all to read it, and if you are not a subscriber, become one!
See you back in NY..
1. Things are good and getting better, especially with the new SEC small public company proposals. We still await, however, the full rule proposal language, and are hopeful there will be additional good news when it is released.
2. There were 206 reverse mergers in 2006, a slight increase from the prior year and virtually tied with the number of IPOs.
3. The aggregate market value of reverse merged companies upon merger in 2006 was a staggering $8.4 billion!
4. There were 59 trading SPACs at the end of 2006.
5. In the first quarter of 2007, there were 53 reverse mergers with a huge $3 billion market cap - 100% higher than the prior year quarter!
6. In 2006 almost 50% of reverse mergers incorporated a contemporaneous financing or "alternative public offering" with a total raised of $850 million or an average of $9.4 million per deal.
7. Chinese transactions constituted 26% of all reverse mergers last year but the total value of those deals is about half of the value of all Chinese deals done in 2005.
8. The average IPO in 2006 raised $216 million, continuing to raise the bar for traditional IPOs.
9. A new study at the University of Pittsburgh showed, among other things, that 91% of companies are still in existence three years after their reverse merger. This contrasts with a previous study suggesting that amount was about half as large.
10. The Pitt study also showed that the median speed to complete a reverse merger was 51 days vs. an average of 111 days for a traditional IPO.
11. One should not write off London's AIM market as there may be certain advantages in certain situations for certain companies.
12. The new issue of The Reverse Merger Report released at the conference includes a full expose on footnote 32 shells, I urge all to read it, and if you are not a subscriber, become one!
See you back in NY..
Labels: Reverse Merger Conference
posted by David N. Feldman at
6/14/2007 05:33:00 PM
2 Comments:
Hi David,
Great blog (and great book too, btw). If you were counseling a company looking to raise $10-20MM, and they were looking at using AIM vs doing an APO on the OTC what would you say are the strongest features of each path? How would you compare and contrast the two exchanges? For instance, which exchange offers the chance at better trading liquidity? How do the listing fees on AIM compare to those of the OTC? Many other questions, but I'll leave it at that for now.
Thanks,
BH
Thanks for your kind words. Well first I would think if you are a US company planning on raising money in the US, it would seem that leaving the country to save a few weeks of time to get public probably is not worth it.
That said, if you have some foreign connection, you should at least consider the AIM. There is less liquidity generally on AIM than OTCBB, but it is simpler and quicker to get listed on AIM. Not sure what AIM listing fees are, but I don't think that's been a factor either way for most people.
At the conference, Ken Olisa of Restoration Partners gave an interesting talk defending the AIM and debunking some (but not all) myths. Yes, they do still settle trades on paper, yes there is less liquidity but not much less, yes it is quick and easy to get trading without big disclosure review since everything relies on the "nominated advisor" or NOMAD to bless the company's disclosure rather than the SEC.
But in a reverse merger with a non-SPAC shell there is also no SEC review prior to closing the merger, and they can be done in 2-3 months, which is only slightly longer than getting yourself on AIM.
Hope that was helpful.
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