A reverse merger (often known as a reverse takeover or reverse IPO) is actually a way for private companies to go public, typically through a simpler, shorter, and more cost effective process. A conventional initial public offering (IPO) is a lot more complicated and costly, as private companies employ an investment bank to underwrite and issue shares of the soon-to-be public company. Besides filing the regulatory documents – and helping authorities evaluate the deal – the bank can also help to establish demand for the stock and provide advice on appropriate initial pricing.

Reverse Mergers The Good And Bad Points