Acquire a Shelf Company – 2 Advantages

A common phenomenon that indicates a peak period in the market, is trading a shelf company. It is characterized by acquistion of small stocks such as stockd of shelf companies. These companies have stopped their business activity for different reasons, buy their stocks are still traded in the market. Eitan Eldar says that these companies can be acquired by a company or private people. Here are two advantages in purchasing a shelf company.

  • Becoming a public company – Private company that wants to become public can reduce the cost of public offering by purchasing a shelf company, merge with it and perform a reverse merger. The shelf company is almost empty of content and the purchasing company pours its content into it. Eitan Eldar adds that this is a way to increase the number of potentional investors.
  • Savings in the offering process – This process of acquiring a shelf company and pouring into it the new content, saves money in the offering of securities in comparison to initial public offering. It is also a cheap way.

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