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Microcap & Penny Stocks : FBRR--FBR Capital---Shell Play w/ tremendous potential
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To: mundellian who wrote (33)3/30/1998 4:15:00 PM
From: Warlock  Read Replies (2) of 72
 
Many private companies would love to be publicly traded (easier to gain capital via public offerings, etc). However, it takes a lot of rigamarole for a company to be listed on an exchange. Much easier option: let itself be acquired by a currently listed company. What would happen in this case is: FBR would acquire (technically) a private company. However, the reverse part is this: FBR's board of directors would step down, and the name of the company would change to that of the private company. The reverse merger is a way to take a private company public. The negotiations involve two things: cash and stock. In return for FBR turning itself over to another company, FBR would get a combination of cash, and a significant portion of the company (15% is a common range I believe). So when a company enters FBR's shell, the name and ticker symbol will change. Also, the value of FBRR would skyrocket (after all, if you were a director on the board of FBR. . . you wouldn't sell out your whole company and seat on the board unless you'd make a huge profit in the bargain would you??). Its expected that once a company enters FBR's shell, FBRR stock would be soon trading at $4-6 a share (no reverse split. . . yes, more than a 1000% gain from today's prices).
I know its confusing. . . I'm no expert myself. But if this is unclear, feel free to ask anymore questions.
BTW, I was just told it may be a month before deal is finalized.
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