Book Review: Reverse Mergers (2E)
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Author: David Feldman Rating: Reverse Mergers describes reverse mergers, their benefits in comparison to an IPO, deal structures, related financings, bad shell situations, legal issues, due diligence, and self-filings. There is excellent coverage of how to value a shell, deal mechanics, and Form 10 shells. Having run a public company that began as a reverse merger, I was watching for a number of points throughout the text that an outsider may not be aware of, such as the reactions of existing shell shareholders when the shell is purchased (they sell), the proportion of bad shell shareholder addresses (high), the use of shareholders of record to go private, changing the charter to issue more shares, and many other points. The author addressed all of them. I got the distinct impression that the author is one of the top experts in the world on this topic. The Financing chapter is extremely important, so read it in detail. Please note that fund raising is a separate activity from engaging in a reverse merger. Also, the Winning Market Support chapter is crucial - many shells have very small market capitalizations, which, as the author points out, leads to minimal market support without intensive investor relations work. There are very few exhibits in the book, but they are all necessary, amplifying upon such topics as the reverse triangular merger and stock exchange listing requirements, which really need some visual assistance. The author avoids the common trap of dumping a large volume of unrelated examples into the text, and instead carefully integrates a smaller number of excellent examples into the book. I can find very few opportunities for improvement in Reverse Mergers. They are:
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