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Public shell is a viable alternative to going public

Public shell transactions are a widely accepted, alternative mean for a private company to go public. A necessary component to a completed reverse merger transaction is the public shell. The public shell is a publicly listed company with no assets or liabilities. It is called a "shell" considering all that exists of the original company is its corporate shell structure. By merging into such an entity, a private company becomes public.

The primary benefits of doing a Public shell, as opposed to an IPO, is the following:

  • You will receive a higher valuation for your company.
  • The company does not require an underwriter.
  • The costs are significantly less than the costs required for an initial public offering.
  • The time required is considerably less than for an IPO.
  • IPOs generally require greater attention from top management.
  • There is less dilution of ownership control.
  • While an IPO requires a relatively long and stable earning history, the lack of an earning history does not normally keep a privately-held company from completing a reverse merger.

The fees associated with a standard IPO are also extremely high. The company must pay for underwriting fees, legal fees, accounting fees, printing costs, and filing fees. WIth a public shell merger, the costs are much less to go public.


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