American investment bankers are often focused on bringing issuers public through an initial public offering. However there is another way to take a companies public that is actually much faster than a traditional IPO. They do this by using public shell companies that were created to engage in a merger or acquisition with an unidentified private company. These companies are fully reporting SEC puglic companies. The main purpose of an SEC reporting compoany or pulbic company is to identifiy and merge with a business through a share exchange or merger or other transaction 

 

Often these types of public shells never had any kind of busines in them before. Therefore the sole purpose of them is to find a company that is private that would like to go public. 

 

The public shell companies have been utilized by market savvy and sophisticated investment professionals. Many of the most famous public companies went public by doing a merger with a public shell.

 

Invvestment dealers, hedge funds instititional investors, and other funds are often prohibiteed from investing in private companies. Therefore, the public shell compoany is a way for the private company to become public very quickly. 

 

To give an example lets say a hedge fund wanted to invest in a privae company but was prevented from investing in private companies.  In this situation the public shell company would be a good way for a private company to become public more quickly then other methods. In addition, for the private company the IPO process can be quite lengthy and the company my lose the interest of the initial fund that wanted to invest. 

 

There are other reasons Investment bankers are interested in these types of public shells. They are already public and they have had no prior operating history. Therefore, funds are freely able to invest in these public vehicles as they meet the requirement for being an SEC reporting public company. In many cases, large investors don't want to invest in private companies because it can be difficult to exit their positions if they want to get out of them or sell.

 

Heavyhitter.co is an expert in connecting private companies with the appropriate professionals to take a company public. Simply get in touch and we can point you in the right direction. 

 

Why your company should use an SEC Reporting Public Company to Raise Funds?

 

Institutional investors and hedge funds that are limited because they can only invest in public companies are free to invest in these public shell companies. This way of going public also benefits the private company as it makes the private company public very quickly and makes it easier for the company to raise capital. It means they can raise capital from those not willing or able to invest in private companies in a faster way than the traditional way of going public. This reduces the uncertainty that investment funds will lose interest in their comopany during the IPO process.

 

Companies that went Public by Public Shell Merger

 

Over time going public by merging with a public shell has proven successful again and again and it is faster than a traditional IPO. The following are some high profile names that have used the PUblic Shell Merge technique. 

 

Berkshire Hathawy

 

Turner Broadcasting

 

Occidental Petroleum

 

Siebert Financial

 

Blockbuster Entertainment

 

Waste Management

 

Radio Shack

 

Also the New York Stock Exchange went public via a reverse merger with Archipelago Holdings.