Exactly where To Go Public?

There are numerous techniques to go public in the US and there are numerous various listings and quotations.

The 3 main levels of listing are:

THE OTC PINK SHEETS: Typically referred to as “pinks”, These organizations are listed by the National Quotation Bureau (NQB). As of nowadays, neither the NASD nor the SEC need Pink Sheet businesses to maintain existing reporting status nor undertake pricey annual audits. Nonetheless, this is quickly altering. (Note, nonetheless, this is at the moment changing. Please see http://www.pinksheets.com/otcguide/categories.jsp )

THE OTC BB: The OTC Bulletin Board is operated by the National Association of Securities Dealers (NASD) and requires that all companies whose stock is traded on the OTC Bulletin Board (or Nasdaq or Amex) keep their present reporting status with the Securities and Exchange Commission (SEC), which contains existing audited financial statements.

EXCHANGES: While the OTC PINK SHEETS and the OTC Bulletin Board are outstanding stock markets, some customers are interested in trading on a single of the much more mature U.S. stock markets – Nasdaq Modest-Cap, Nasdaq NMS, NYSE or AMEX. There are varying levels of qualification for each exchange like asset levels, number of shareholders, required Board level committees, and marketplace capitalization. All exchanges need the business to preserve a present reporting status with the Securities and Exchange Commission (SEC), which involves present audited financial statements Usually, a business wishing to trade on one particular of these exchanges will need a minimum of $ 20 – one hundred million in annual revenue and net income of at least $ two million annually.

For a US firm a quotation on the US stock markets is a way to:

1)Leverage a bigger retention of ownership

2)Grow your organization faster and make it far more effective by attracting best personnel with out necessarily large cash outlays

three)Grow your business faster and make it more strong by attracting leading notch team members to your board of directors

4)Raise cash faster and less expensive by increasing the “liquidity” issue for your investors

five)Develop your organization more quickly and make it much more effective by rising your capacity to attract “mergers”, “acquisitions” and “strategic partners

6)Develop your firm more rapidly and make it much more powerful by escalating its ability to compete for large corporate contracts

7)Leverage your private return on investment as an owner by decreasing the amount of time it will take you to make cash on your investment, as effectively as increasing the valuation of your firm, as effectively as, altering the liquidity of your asset to a significantly far more liquid type than that of a private firm

8)Develop your business quicker and make it much more potent by growing your status in the eyes of all these you do business with.

For a foreign corporation a qutation on the US stock markets is a way to:

1)Increase liquidity for the owners of the corporation by tapping into a liquid US marketplace

two)Tap into the US capital industry (the biggest in the globe) for expansion of enterprise at house and internationally

3)Hedge against foreign currency – by diversifying your holdings into US dollars it is a way to hedge against the foreign markets volatility

four)Tap into the huge leverage achievable on the US stock industry as detailed in leverage point above. Usually time foreign laws and exchanges do not permit the owners the large leverage offered on the US stock markets. For example, being capable to raise 100million dollars and keeping 70-80% handle of the US corporation is not something you can do on all foreign exchanges)

5)Expand your organization into the US and tap into strategic alliances– US businesses are much more most likely to do enterprise (and do organization on a lot more favorable terms) with a US public corporation than a foreign corporation

6)Tap into US and International personnel pools. Crucial US and INTERNATIONAL personnel are far more accessible to a US public corporation

7)Tap into the international MERGER and ACQUISITION market. US and INTERNATIONAL firms are more probably to turn out to be an acquisition or merger candidate for a US public corporation.

(c) 2007 Charlene Kalk
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