|Public Equity Services
Targeted IR recommends an experienced company to provide its visitors and clients with access to already created shell companies. Fill out the contact info below to be referred to our recommended company.
TIR's recommended company is a intermediary agent between 'publicly traded shells', and private companies looking to go public through a reverse merger. Reverse mergers allow 'private' companies an alternative option when it comes to raising financing, making acquisitions, or building liquidity for its current shareholders.
Also, this company's Shell Capital Investment Program, along with providing your company with the most cost effective means to become publicly traded, no deposit bingo, our referral company works closely with each company in the areas of regulatory issues and equity financing. They work from start to finish to insure each client with a professional, cost effective, and streamlined means to bring their company public. Let our referred company guide you through the process. Each public shell includes the following services: Regulator Consulting through Merger Process Legal and Auditing Services Advisory of Financing and Capital Formation Investor Relations and After Market Support Institutional marketing to Financial Institutions, Broker Dealers, Hedge Funds, and Accredited.
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Contact About Buying An Existing Shell Company and Go Public:
Why Go Public?
There are many benefits to being a public company.
Some of the most compelling advantages can include:
1. Access to capital
Being a public company can give investors more confidence in investing in your company. When your stock has a public price, it gives you a benchmark price to raise capital. Any potential investor can go on the Internet or call a broker and get a quote of your company’s stock price. Some public companies then give investors who buy stock directly from the company in a private placement a discount from the public trading price (if they are willing to hold the stock for one year). This gives this investor even more of an incentive to invest.
Money raised can be used for a variety of purposes including; growth and expansion, retiring existing debt, corporate marketing and development, acquisition capital and corporate diversity. Once public, a company's financing alternatives are greatly increased. A publicly traded company can go to the public markets for capital via a stock or bond issue, and may also convert debt to equity.
By going public, a company can create a market for its stock. This gives the company a greater opportunity to sell shares of stock to investors. In general, stock in a public company is much more liquid than stock in a private enterprise. Liquidity is created for the investors, institutions, founders, and owners. Investors in the company may be able to buy or sell the stock more readily. Often times institutional investors and venture capitalist will require a company to become public before committing funds.
Ownership of stock in a public company may help the company's principals to borrow more easily and eliminate personal guarantees. Liquidity can also provide an investor or company owner an exit strategy, and portfolio diversity. Liquidity is one of the many reasons why public companies are typically valued so much more than a private company.
3. Mergers and Acquisitions
Once a company is public and the market for its stock is established, the stock can be considered as valuable as cash when acquiring other businesses.
A public company usually increases a company's valuation leading to a variety of opportunities for mergers and acquisitions. A public company also has the advantage of using the market's valuation when exchanging stock in an acquisition.
Securities and Exchange Commission disclosure requirements offer the public more confidence because in annual reports the company outlines its financial condition and corporate strategy which encourages corporate growth, development and merger activity. In addition to acquiring companies many other assets can be purchased with stock.
4. Increased Valuation
The market value of a public company is normally substantially higher than a private company with the same structure in the same industry. Converting a private company to a public company results in a substantial increase in value to owners. Statistics published by the United States Chamber of Commerce show that sellers of private companies receive an average of 4 to 6 times their net earnings. By comparison, public companies sell at an average of 25 times their net earnings. High tech companies are valued even higher.
Investors in a private company will discount the value of its equity securities by reason of their "non-liquidity" - the lack of a ready, public market for them. Thus, public companies often are valued so much greater than private, similar companies in the same industry. The availability of other alternatives to raising capital permits a public company greater leverage in its negotiations with both institutional and individual investors. Many institutional and individual investors prefer investing in public companies since they have a built-in "exit," that is, they can sell their stock in the public market. Many companies that were private and about to be purchased went public to be purchased at a much higher price.
Many companies use stock and stock option plans as an incentive to attract and retain talented employees. It is increasingly common to recruit and compensate executives with a combination of salary and stock. This reward could be deemed even more desirable when the company is publicly traded. Stock can be instrumental in attracting and keeping key personnel. Also, certain tax advantages are a consideration when issuing stock to an employee. Being public can help to create a market for the company's stock. This market can result in liquidity and reward for the company's employees.
A stock plan for employees demonstrates corporate goodwill and allows employees to become partial owners in the company where they work. An allocation of ownership or division of equity can lead to increased productivity, morale and loyalty. This type of compensation is a way of connecting an employee’s financial future to the company's success.
A public offering of stock can help a company gain prestige by creating a perception of stability. The status of being a public company can have a dramatic effect on a company's profile, perceived competitiveness and stability. This perception can lead to expanded business relationships and added confidence in the consumer.
A company's founders, co-founders and managers gain prestige from being associated with a public company. Prestige can be very helpful in recruiting key employees, marketing products and services to your target market. When sharing ownership with the public, you enhance the company's reputation and increase its business opportunities. Your company can gain additional exposure and become better known.
Often a company's suppliers and consumers become shareholders as well as joint venture partners, which may encourage continued or increased business. Once public, lenders and suppliers may perceive the company as a safer credit risk; this will enhance the opportunities for favorable financing terms. Indeed, the suppliers' and customers' perception of company success is often a self-fulfilling prophecy. Many people have called it the ultimate status symbol.
7. Personal Wealth
One of the most important benefits of a public offering is the fact that the company's stock eventually becomes liquid, offering rewards and financial freedom for the founders and employees.
A public market for stock provides a potential exit strategy and liquidity to the investors. A psychological sense of financial success can be an added benefit of going public. A public company can enhance the personal net worth of a company's shareholders. Even if a public company's shareholders do not realize immediate profits, publicly-traded stock can be used as collateral to secure loans. Many feel it makes sense at an appropriate time for investors and entrepreneurs to cash out some of their equity in order to diversify their holdings or to enjoy life. Employees and officers have two ways to add to their wealth: by receiving a salary and selling stock or trading the stock for another type of asset.
8. Estate Planning
The public company can be utilized as part of a retirement strategy for business owners and allows them to pass assets to heirs. A business owner may wish to transfer the accumulated value in a business to relatives who have no interest in or aptitude for running it, dividing up property among family members, and settling up an estate.
Public companies are more likely to receive the attention of major newspapers, magazines and periodicals than a private enterprise. The proper use of press releases, interviews or news stories can increase investor awareness, shareholder value and demand for the stock. A strong ad campaign coupled with media initiatives can potentially increase sales and revenue.
The publicity received from being public can encourage investments from the public, new business development and strategic alliances. Analyst reports and daily stock market tables contribute to further awareness by consumers and the financial community. By virtue of being a public company your company's story can more easily get out to the world. This allows for investors who would not invest in private companies but will invest in public companies to find out about your company.
The publicity that a public company may receive can attract the attention of potential partners or merger candidates. Because the financial condition of a public company is subject to the scrutiny of the Securities and Exchange Commission reporting requirements, existing or future business relationships are strengthened. Many private firms do not appear on the radar screen of potential acquirors. Being public makes it easier for other companies to notice and evaluate your company for potential synergies.
One way many companies go public is through reverse mergers with public shells. When doing a reverse merger with a public shell it can be very expensive and there are several things you must be aware of.
There are several types of public shells, which are all very expensive. They are also usually loaded with liabilities. If you reverse merge a company into a public shell (which usually has 100 or more shareholders and a lot of shares in the float) when the stock price goes up these 100 shareholders inevitably sell the stock and the price collapses. This can be detrimental to a company trying to grow through acquisition. This is far more expensive than the up front price paid to do the reverse merger with the public shell. Please keep this fact in mind when you are dealing with reverse mergers or public shells. This point is absolutely critical to understand. If you do not understand the importance of the public float your going public experience can be disastrous.
Pricing an IPO Stock
The Issuer who is planning an IPO nominates a lead merchant banker as a 'book runner'.
The Issuer specifies the number of securities to be issued and the price band for orders.
The Issuer also appoints syndicate members with whom orders can be placed by the investors.
Investors place their order with a syndicate member who inputs the orders into the 'electronic book'. This process is called 'bidding' and is similar to open auction.
A Book should remain open for a minimum of 5 days.
Bids cannot be entered less than the floor price.
Bids can be revised by the bidder before the issue closes.
On the close of the book building period the 'book runner evaluates the bids on the basis of the evaluation criteria which may include -
Earliness of bids, etc.
The book runner and the company conclude the final price at which it is willing to issue the stock and allocation of securities.
Generally, the number of shares are fixed, the issue size gets frozen based on the price per share discovered through the book building process.
Allocation of securities is made to the successful bidders.
Book Building is a good concept and represents a capital market which is in the process of maturing
|Advantages of Being a Publicly Traded Company
|Mergers and Acquisition: Public stock can be used for companies to grow through acquisitions
|Higher Valuations: Public Companies typically valued more than private companies
|Benchmark Trading Price: The trading price of a public company's securities serves as a benchmark for the offer price of a subsequent public or private securities offering
|Capital Formation: Raising capital later is usually easier because of the added liquidity for the investors
|Incentives: Stock options or stock incentives can be useful in attracting management and retaining valuable employees
|Reduced Risk: A risk involved in an underwritten public offering is that it may be withdrawn due to market conditions even after most of the up front costs have been expended. This could be several hundred thousand dollars or more
|Reduced Business Requirements: While an underwritten initial public offering requires a relatively long and stable earnings history, the lack of an earnings history does not keep a privately held company from becoming a public company
|Reduced Dilution: There is less dilution of ownership control compared to a traditional Initial public offering
|Reduced Underwriter Requirements: No underwriter is needed: (a significant factor to consider given the difficulty companies face in attracting an investment banking firm to commit to an offering)
|S-8: Form S-8 stock can be issued to employees and consultants
|Liquidity: More liquidity for founders, minority shareholders, and investors
|Prestige: Added prestige and visibility with customers, suppliers, employees and the financial community
|Increased Personal Wealth, Estate Planning Opportunities