Bache "going Public" Via Reverse Merger

PALM HARBOR, Fla. - April 13, 2019 - PRLog -- Whether a seasoned banker or a starry-eyed entrepreneur, doing an IPO, or initial public offering, is synonymous with the very idea of taking a firm public.

That does not mean it is either the most cost effective or quickest way to get a company up and trading Over The Counter, or on a regional stock exchange.

As an example, Spotify, utilized a whole new route in taking their company public on the New York Stock Exchange.  For Spotify, it saved a tremendous amount of capital utilizing the fastest and most say, easiest route to have shares traded in the public market place.

Spotify, a music-streaming service, opted for an unconventional alternative called a "direct listing" one method of a Reverse Merger,  prompting debate. Instead of paying investment banks hefty fees to arrange an IPO, Spotify plans to have existing shares simply switch one day to being tradable on the New York Stock Exchange (NYSE).

IPOs themselves have become rarer, as startups such as Uber and Airbnb have chosen to raise money through private markets instead. Although there was an uptick in the number of IPOs in America in 2017—108, compared with 74 in 2016—the average number of IPOs has remained at around 100 annually since 2000, compared with over 300 in the course of the two previous decades. But until now no big company had contemplated direct listing as an alternative. The structure has been seldom used: in America, examples include a few vehicles for investing in property and a handful of small biotech firms. Among American exchanges, only NASDAQ has so far allowed such listings; the NYSE has proposed a change to its own rules that would allow them (it is still to be approved by regulators).

This is the case of Merchant Bank "Bache & Co.", who provides the consulting services to put the different pieces of the puzzle together.  "Bache" utilizes its own capital, to purchase a block of shares in the company, to meet net worth requirements, and participates in the Private Placement to raise capital,
Incorporation Services -  A new S Corporation (Newcorp)is created with the proper structure, By-Laws, Officers,Directors and deal specific corporate structure.

Merger & Acquisition Services - A Mergers & Acquisition document is prepared,  wherein the "NewCorp" acquires 100% of the stock of the existing corporate entity, "OLDCorp.

A Reverse Merger and an IPO contain many of the same elements: Bache will consult with the firm to drum up investor interest through a roadshow, sign up new investors, set a target price, line up blocks of shares from existing shareholders, underwrite new share issuance and smooth trading on the first day by guaranteeing a floor for the share price. A direct listing comes with no such luxuries. With no new share issuance, all shares that come to market must come from existing shareholders. But with no special provisions for large blocks of trades, they will only be able to sell what the market will bear; a large sell-off would cause the price to plummet. And if too few shareholders sell, the first days may see thin and volatile trading, resulting in strange pricing for the shares.

Why would Spotify take the direct option? The savings on underwriting fees are tremendous. Perhaps more important is that without the 3-6 month lockup period typically seen in IPOs, existing holders will be free to sell shares when they want. In the meantime, they need not fear their position being diluted.

Larry Bache Sr. has written a new updated book and worked with eIntelco to develop a software package that takes a company thru the process of setting up the perfect publicly traded corporation, ready to trade, with symbol, on the US, Canadian and EU markets.

The new book also utilizes Social Media and online funding outlets for firms that want to raise capital as part of Reg A+ offering.  Up to $5M can be raised woithout audited financials, and $50M can be raised with audited statements.

The Book and Software package will be available online, at iTunes and Google, plus major bookstores. Bache can be contacted at http://www.Bache.US

Infformation regarding this article was obtained from SEC Filings.