Reverse Merger

The reverse merger occurs when a public company acquires a private one. It works as follows:

1. A public company has fewer operations than most. It might be interpreted as a shell company.
2. As the public company takes over the private one, the public entity will have full access to the market. More importantly, the company will not have to spend a lot of money to initiate an IPO.
3. The shareholders who held stock in the company that was acquired will have their shares exchanged for a controlling interest in the newly public company.

This is an interesting move that might provide you with a larger investment that could work well for you. The problem is that the stock produced by the reverse merger might end up being worth less than what you already have. It might be best to sell the stock before the merger can go through. Find information on the company that is proposing the reverse merger.