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All Posts Term: What is a Reverse Merger
21 post(s) found

Upcoming Reverse Mergers

Upcoming Reverse Mergers

UpcomingReverseMergers

ML is the abbreviation for a reverse merger, but not all mergers are created equal. Reverse mergers, or RMs, allow exchanges to pursue increases in market capitalization without a concurrent share price increase. Although they are becoming increasingly popular, they’re still only accessible to sophisticated investors who have long-term investing goals in mind like generating capital appreciation and diversifying risk exposure across asset classes with minimum volatility.

How Do Reverse Mergers Work

Upcoming Reverse Mergers involve a private company issuing new common stock (or preferred shares) in exchange for publicly traded securities of another company. Companies conducting RMs can be smaller penny stocks, small cap names with fewer than $100 million in market capitalization, or even large cap companies looking to go private. This is opposed to “traditional” mergers, where two public entities merge into one.

In order to take advantage of RMs, investors need to be able to identify potential targets. This is typically done through technical analysis and due diligence, since a company’s past and future earnings will directly impact its stock price. However, the recent rally in large cap equities has made it easier for investors not familiar with specific companies to perform an evaluation.

Once a potential target is identified, investors need to assess whether it’s a good fit for their portfolio and a logical partner in their investment thesis. Once again, the recent rally has made this an easier process – sometimes companies will jump 20 to 30 percent in the days preceding an RMs announcement.

A few things need to be pointed out before jumping into a market capitalization increase via reverse merger. First and foremost, you need to make sure that your investment thesis makes sense in light of recent market activity. Not every reverse merger is going to work out well. For example, one company recently announced that their RMs were unsuccessful simply because their target company was not worth the risk they were taking on.

Shifting from the short-term trading mentality to a long-term investment view is also important. A company’s prospects for success and revenues for the next 5 years will determine its intrinsic value, which must be evaluated against trading multiples in order to determine a fair price. However, it’s important to realize that this is not always the case, and that there are many variables at play when determining fair value.

Investing in Reverse Mergers

One thing you cannot ignore is market psychology. When you are looking to buy a stock as an investment vehicle, it’s useful to understand the psychology of the market. Money flows into markets in anticipation of changes in things like earnings or dividends. This only intensifies the magnitude of the reaction when those earnings or dividends are announced. In other words, after manipulation by money flows, the stock price will often rise significantly more than it would have otherwise.

When you are looking for a company to target, you’re looking for a company that has strong fundamentals; one that looks like it would be attractive to most investors. For example, high growth companies in hot sectors will attract money flows that could push the stock higher due to appreciation in intrinsic value.

All You Need To Know About Hypebeast Reverse Merger

All You Need To Know About Hypebeast Reverse Merger

Hypebeast

If you love sneakers and streetwear, you might be well-versed with Hypebeast. This is a Hong Kong-based company that manufactures sneakers and streetwear. It is a household name in Hong Kong and the entire East Asia region. The 16-year old company is better-known for setting the standards in the streetwear fashion industry, but it's also involved in technology, sports, art and food. The company prides itself in identifying emerging trends in culture and lifestyle to create an eco-system that promotes cultural discovery and connection.

Hypebeast Reverse Merger

The company is planning to list on the Nasdaq by merging a SPAC with an already-listed company Iron Spark. The merger will see the new entity listed on the Nasdaq with an already-identified ticker "HYPE". Merging a profitable or high-potential company with a public company that is not doing so well is the cheapest way of taking a company public. This is because the cost of taking a company public through an IPO is beyond the reach of many businesses. Through the merging of the SPAC and the public company, Hypebeast will become a publicly-listed company. It is important to note that the company is already listed on the Hong Kong Stock Exchange, so it will be dual listed on the two major exchanges.

What Products and Services Does the Company Offer?

Founded by Kevin Ma in 2005, Hypebeast was originally just a sneaker blog. The company has now grown to be an e-commerce and digital media company that focuses on lifestyle, culture and fashion. It mainly focuses on streetwear fashion. The company has grown to become one of the trend-setters in Hong Kong.

Who is Involved in the SPAC?

The Hypebeast Reverse merger deal is backed by a star-studded pool of investors, including Naomi Osaka - the tennis star, Tom Brady - the famous quarterback, Kevin Durant - NBA star, Rich Kleiman, Adam Levine, Joe Gebbia and Tony Hawk among other stars.

In New Reverse Merger Circle Doubles Valuation to $9B

In New Reverse Merger Circle Doubles Valuation to $9B

Circle

Circle has doubled its valuation after inking a deal with blank-check company Concord. Concord is the latest so-called Special Purpose Acquisition Company (SPAC) - another name for a blank-check company or shell company - to agree a reverse merger with a crypto firm.

Circle, the cryptocurrency startup backed by Goldman Sachs, has agreed to a merger with blank-check company Concord. The deal will value Circle at $3B and the combined market cap of the new entity is expected to be $9B.

Financing of all types has been tough this year, but companies still need to grow. It’s a strange paradox that’s led to explosion of SPACs taking companies public through reverse mergers. TechCrunch understands that one of the latest big private tech companies to ink a deal with a SPAC is Circle, the crypto financial services and stable coin provider that boasts major institutional clients like Goldman Sachs, and is part of the Blockchain Association.

The Unique StableCoin

Circle, a United States-based company, is another popular option for Crypto users in search of a stablecoin. Circle has an especially unique approach to its Stablecoin when compared to other coins, including Tether. Circle takes the stance that transparency helps reassure users that the USD-pegged coin is legitimate. As a result, it opted to undergo frequent third-party audits from regulators and make the results available for public viewing.

Public Auditing by Armanino

After launching a US dollars-backed Stablecoin in September 2019, Circle has partnered with the Florida-based auditing firm Armanino to conduct bi-quarterly audits on its fully reserved dollar tokens.

Triller Reverse Merger: An Exciting Venture

Triller Reverse Merger: An Exciting Venture

Triller Reverse Merger

When there was talk of inroads towards a reverse merger between Triller and SeaChange International, a lot of people didn't realize what was actually taking place. Much of the cynicism and confusion of major shareholders was largely around what exactly a reverse merger is, and the consequences which would follow from such a drastic move. So when a private company like Triller finally mergers with it's counterpart -a publicly owned enterprise- in a deal that is earmarked for the first quarter of 2022, this will have the effect of the former being listed on the NASDAQ stock exchange, a move that is set to increase it's market dominance. The creation of the combined entity now aptly known as TrillerVerz Corp has it's primary focus being the broadening of its marketing and advertising abilities by venturing into satellite, cable and OTT media in a bid to break into the Gen Z market.

Diversification As A Driver For Long-term Growth

The primary driver behind the merger is to build and consolidate the creators industry by mainly focusing on monetization and distribution of engaging and stimulating content. The advent of TikTok's almost meteoric rise is what inspired the merger, as the younger generation has completely distanced itself from mainstream music and film companies, to create their own opportunities for making their diverse talents known by the greater world community. So when all is said and done, the Triller reverse merger is set to reinvent the impetus behind universal stardom. For what its worth, Triller aired a virtual hip hop competition sponsored by world renowned Pepsi, which was advertising its novel wild cherry flavored cola.

All You Need To Know About Rumble SPAC

All You Need To Know About Rumble SPAC

Rumble

Rumble is a Canadian company that was formed in 2013 and operates as an online video tube. The founder of the Rumble platform is Chris Pavlovski. The company has been growing rapidly with an ever increasing monthly user count. In July 2020, Rumble had a monthly user count of 1.6 million. In the first quarter of 2021, however, the number of monthly users stood at 31.9 million. Recently, rumors have been doing the rounds regarding the future of Rumble Inc. It has now been confirmed that the company is going public via an SPAC deal. Rumble Inc is merging with a special acquisition company known as CF Acquisition Corp IV.

How Much is the Rumble SPAC Deal Worth?

The Rumble SPAC and CF Acquisition deal is estimated to be worth $2.1 billion. In this merger transaction, Rumble is expected to make about $400 million. This comprises $300 million liquid cash held by CF Acquisition and $100 million from PIPE fundraising. Pipe is short for Private Investment in public Equity. In this lucrative deal, the founder of Rumble Inc is expected to retain voting rights, which means he will have a say on the direction the company is going to take after the merger.

What Does Rumble Offer?

Rumble is an online video service that mainly offers online video hosting services. It is incredibly popular with conservatives. This is where the Trump connection comes in. The former US president loves Rumble and his followers are not any different. That is why stock prices of CF Acquisition IV increased by double digits when the partnership between Truth Social and Rumble Inc was announced.

In this partnership deal, Truth Social is going to use the Rumble video hosting service as its default platform for distribution. This means that any video that's uploaded onto Truth Social or streamed live on Truth Social will use Rumble. It's a big deal, and that explains all the excitement in the stock market.

Wejo Reverse Merger Results In $1B NASDAQ Listing

Wejo Reverse Merger Results In $1B NASDAQ Listing

Wejo

The SME investment specialist Seneca Partners announced that Manchester-based Wejo has just finished a reverse merger with Virtuoso Acquisition Corporation. Trading has already for the expanded company begun on NASDAQ last Friday, November 19.

Wejo is known as one of the leading names in connected vehicle data but it is not resting on its laurels. The company knows that it has tremendous growth potential and it is doing what it takes to accelerate expansion to various markets. Among its targets are advertising, insurance, payments, traffic management, fleet management, remote diagnostics, SaaS solutions, roadside assistance, car sharing, and car rentals.

Automotive Big Data

According to company statistics, Wejo is now collecting an average of 14.6 billion data points each day. It is also analyzing 66 million journeys of about 10.7 million active vehicles daily. Its supply base is more than 50 million connected vehicles and continuing to increase at a rapid rate. Indeed, Wejo predicts that almost half of the vehicles around the world will become connected by the decade's end. The volume of data will skyrocket, thus the need for the company to get ready for take-off.

Investment Partners

Seneca Partners has been supporting Wejo's growth since 2016 and is pleased with the result of the merger. One of their investment directors Matt Curie says that Wejo has had a strong management team since the beginning. This has definitely helped the company navigate a dynamic business environment over the past few years. Curie reiterates that Seneca remains committed to the development of businesses within the North West SME community. They have a strong relationship and wide footprint that they will continue to nurture.

Curie also lauded the UK government's pro-business programs that help innovative startups raise capital to grow and become competitive. In this case, Wejo was able to take advantage of the Enterprise Investment Scheme. EIS gives investors tax relief as incentive so that more would be willing to purchase the shares of beneficiary companies.

Seneca is not just focused on raising funds and deploying these. They have the proven ability to select the best investment opportunities among multiple options. They are also able to get cash returns within reasonable timeframes. The case of Wejo is another proof of their expertise in finding excellent startups and guiding their growth. It will further strengthen the trust of investors and advisers.

Guerrilla RF Reverse Merger

Guerrilla RF Reverse Merger

GRF-logo@2x

Guerrilla RF conducted a reverse merger with Laffin Acquisition Corp, a public Delaware firm, and became a Laffin subsidiary.
Following the transaction, Laffin renamed itself 'Guerrilla RF Inc,' and will continue to operate as Guerrilla RF did previously.

What does Guerrilla RF Produce

Guerrilla RF supplies wireless OEMs with high-performance monolithic microwave integrated circuits (MMICs) for a variety of applications, including 5G/4G macro and small cell base stations, cellular repeaters/DAS, automobile telematics, and machine-to-machine (M2M) systems.

Guerrilla RF’s MMICs enable its customers to increase the capacity of their networks with superior spectral efficiency and improved reliability. These MMICs are used in cellular base stations for both current 4G/LTE networks, as well as for 5G macro and small cell applications around the globe. This is accomplished through Guerrilla’s patented Sigma-Sigma modulation technology and high linearity architecture.

Guerrilla’s solutions also support all mobile broadband standards, including: 2G, 3G, 4G and most importantly, 5G.

Why a Reverse Merger

In a reverse merger, a private company merges with a publicly traded shell company. In so doing, the private company acquires a publicly traded stock with a liquid trading price. The key advantages of a reverse merger over an IPO are: lower cost, greater speed, and potentially larger share price increase resulting from a better performing public shell company. A shareholder of the private company continues to control the resulting public company.

A reverse merger has similarities to an initial purchase offering (IPO) (in the sense that some securities exchanges allow some companies to be listed on an exchange through an APO) and to a forward merger (in the sense that the resulting company is publicly traded).

Who much was raised in the Guerrilla RF public transaction

Guerrilla RF has secured more than $7 million through a private placement offering and a reverse merger transaction.

Following the issuance of the first tranche of securities in May, Guerrilla RF closed on an additional $6.5 million through the issuance of convertible notes payable. During the same time, the company completed its reverse merger transaction with Guerrilla Acquisition Corp., which resulted in the creation of public company Guerrilla RF, Inc.

How is the semiconductor market in 2021

Right today, the semiconductor market is quite strong.

In the semiconductor business, there are well-publicized supply chain issues, but we expect those challenges to be minimized and, hopefully, overcome by 2022.

There are several major factors that make our current market conditions conducive for investing in this sector. First, the industry is transitioning from NAND to 3D NAND, which has increased investment in capital expenditures for semiconductor manufacturers. Second, the recent increase in the amount of DRAM production capacity has not created a surplus in DRAM products on the open market. Third, China is increasing their semiconductor manufacturing capacities through advanced manufacturing facilities. The influx of global manufacturing capacity has lowered prices of memory semiconductors. Prices are expected to remain low for memory semiconductors through at least 2022 due to continued increases in supply chain capacity.

All That You Need To Know About Sphere 3D Reverse Merger

All That You Need To Know About Sphere 3D Reverse Merger

Sphere 3D Reverse Merger

A Canadian company named Sphere 3D signed a deal with Gryphon Digital Mining in a reverse merger. The ultimate end of the deal is to transform Sphere 3D into a fully recognized Bitcoin entity. Since the merger, Sphere 3D has been able to raise about $192 million to buy 60,00 servers. The result of this is that Gryphon is expecting to become a prominent investor in the Bitcoin world.

What will be the market cap of the company after the merger?

Although reverse mergers have their advantages, the truth is that they, too, have their downplays. Nonetheless, the advantages of the merger always overwhelm the disadvantages. When companies go for reverse mergers, they expect fewer risks, enjoy a public company's benefits, and less dependence on the market conditions.

In addition to enjoying all the benefits associated with a reverse merger, Sphere 3D stands a better chance to make huge profits, and the same applies to Gryphon. Buying more Bitcoin miners means making more money and hence the growth of the company.

What is the primary service the company offers?

If it is your first time hearing about Sphere 3D, then one of the questions you are likely to ask yourself is what the company's primary services are. The fact is that Sphere 3D is a company that specializes in offering a wide range of solutions to companies that want to offer agility and flexibility to the end-user.

Interestingly, the company offers verticals in the financial sector, healthcare, education, and government sectors. For instance, in the healthcare industry, they deliver virtualization technology to make the management of the healthcare system effective and reliable.

Is the stock something you would purchase?

When it comes to putting your money in any investment, you need to warrant that you will get your money back in the long run. That is why it is prudent to do some due diligence to ensure that you are making the right choice.
If you are looking for a crypto mining venture that will not disappoint, you need to understand that Sphere 3D is one of the solid stocks to build your crypto mining portfolio. Further, the reverse merger seems to be making things better for those who are interested in cryptocurrency---the company projects to become a carbon-neutral leader in the Bitcoin market and related fields.

What You Need To Know About Forbes Reverse Merger

What You Need To Know About Forbes Reverse Merger

forbes-924140_1280

The reverse merger of the Forbes magazine with Magnum Opus Acquisition Ltd is the freshest example of media companies catching SPACs. It is a lucrative deal that seeks to allow one of the oldest media publishers, Forbes, to invest further in consumer-focused products while reducing dependence on media revenue. The profit projection resulting from Forbes reverse merger is expected to go high by the end of 2021.

Why is the Reverse Merger Happening?

The next question that anyone is likely to ask themselves is why the merger is necessary. While it will be incorrect to say that the reverse merger does not have any demerits, the truth is that the advantages always outweigh the disadvantages. The typical benefit of a reverse merger that everyone knows is that it saves the private company from the complex and expensive process of becoming a public company. However, that is not all, as many other reasons make private companies choose this path. For instance, it helps in saving the taxes of a private company.

Another benefit of a reverse merger is that it does not negatively impact the competition in the market. It is rare to see the reverse merger on hold because of the negative impact of its implementation. In other words, there is more to celebrate about the merger.

What will the company look like after the Forbes Reverse Merger?

Once the merger between Forbes and Magnum Opus Acquisition Ltd is complete, you do not expect things to remain the same. It is most likely that things will change in one or the other. Although the profits may increase as projected, some disadvantages might come with the entire process. For example, the employees from both sides will be affected. Some may lose their livelihoods, and those lucky enough to survive should expect lots of things. Shifting of roles and confusion among employees is inevitable. Also, the struggle for power among employees may affect the growth and the development of the business. The great news is that this is not likely to last for an extended period before things shape stars to shape up.

Self-Driving Startup Aurora To Go Public In Reverse Merger

Self-Driving Startup Aurora To Go Public In Reverse Merger

AuroraTrucks

Self-driving technology startup Aurora announced that it will go public through a reverse merger transaction with Reinvent Technology Partners Y (Reinvent), a special purpose acquisition company (SPAC), that will provide the company with a cash injection to help continue its development of autonomous truck driving technology and, in the future, for self-driving passenger vehicles as well.

What is a Reverse Merger?

Reverse mergers, and the SPACs that enable them, have become a somewhat controversial method for companies to go public without having to otherwise meet the strict requirements for listing. Going public is not usually an option for companies such as Aurora that do not have a profitable business model in place (and that have not, in fact, made any profits). In addition, this move comes at a time when the overall self-driving car industry is struggling with failed deadlines, still unreliable technology, high cash burn rates, a loss of public trust and the failure of many similar companies. The move to invest more money into self-driving startups either indicates confidence in a forthcoming technological breakthrough or a desperate attempt to keep companies afloat until this major challenge to artificial intelligence applications is overcome, analysts have opined.

Aurora Founders

The Aurora SPAC funded by Reinvent will result in an injection of more than $2 billion into Aurora so that it can continue its (expensive and unprofitable to date) operations for several more years. Reinvent was launched by Reid Hoffman (the co-founder of LinkedIn), Mark Pincus (Zynga founder) and investor Michael Thompson. Other investors include various other Aurora funders as well as other partners including T. Rowe Price and Associates, Sequoia Capital, Uber, Index Ventures, PACCAR and Volvo, among others.

Aurora’s Products and Competitors

If Aurora's plan is successful investors are likely to see huge returns for their backing but the road ahead is risky and uncertain according to industry analysts. The move to focus on self-driving trucks makes sense from a business perspective but other moves, such as autonomous ride-hailing, have been found to be much more difficult to implement with both Uber and Lyft abandoning their efforts. If Aurora manages to deliver its self-driving truck technology it will give it access to a huge and profitable market the income from which could fund their continued research and development to reach their ultimate goal. This is necessary to overcome the accelerating losses the company has experienced with losses of over $214 million in 2020 and $94 million in 2021.

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