Summary Comparison with IPO
Certain private companies may find a reverse merger with a public shell more attractive than an initial public offering of their securities. Reasons for this may include the following:
- inability to obtain underwriter;
- possible larger costs, fees and expenses;
- possible delays in the public offering process;
- greater dilution of their outstanding securities.
Certain private companies may find a reverse merger with a public shell less attractive than an initial public offering of their securities. Reasons for this may include the following:
- no investment capital raised through a business combination or reverse merger;
- no underwriter support of after-market trading.
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