It is very difficult for small companies to get investor attention. There is an old saying, “stocks are not bought, they are sold,” meaning that you have to push the stock on the investors.

There are many investor relations firms for small companies that require payments of up to $350,000 in stock or cash to push the stock.

These firms generally operate using large email lists of speculative investors. They appeal to speculative fever.

These firms have an inherent conflict of interest – they are not only paid to tout the stock, they want to sell their compensation stock to get cash at a time when, or just after, they have told their investors to buy. Failure to disclose these conflicts is a violation of the securities laws.

After studying stocks and business for decades, we find that we are often able to find ways of presenting companies to investors that incite action.

Selling Shell Merchants

One of the problems facing companies that buy shells is that the people who sold the shell, and the shell’s public shareholders, upon seeing their stock up with substantial value and market price after the merger, will want to dump their stock on the market, depressing the price.

This, in my opinion, outside of the expense of buying a shell, and the chance of there being a costly hidden defect in the shell, is one of the big reasons to do a self registration.

Short Sellers – Another Enemy

Please be advised that there are short sellers who prey on small companies that have negative cash flow. The short sellers know that companies with negative cash flow need to sell stock to survive. They know they can deprive the company of funds by beating the price down with aggressive selling and smear campaigns. If they are successful, the company will die or enter the land of the living dead – trading at prices in the cellar.

You Need a Plan

In order to be a successful reverse merger company, you need to know that you have a secure way to raise adequate funds and support the stock in the aftermarket.

Full Disclosure

I have always believed that full disclosure is the best way to create confidence in investors and encourage them to back you with their money.

Now, after the Chinese reverse mergers problems, there is more reason than ever to make the highest quality disclosure possible, no matter how you do your deal.

Expertise

As you consider the wonderful possibilities from having your company fully funded to the point that you seem to have your own private ATM, and as you contemplate the complexities of the securities laws and the hidden predators in the financial markets, we trust that you will start to understand the importance of working with experienced and qualified advisors who can overwhelm your enemies and open the doors to the mysteries of Wall Street. We are here to assist you and we are always looking for the next big thing. Please take the opportunity to contact us. If we have too many other commitments to assist you now, we will be happy to advise you on where to seek assistance.