Since 2014
A Performance-Related Study of Reverse Mergers Using Private Investment in Private Equity (PIPE) Strategies
GSTF Journal on Business Review
View Archive Info| Field | Value | |
| Title |
A Performance-Related Study of Reverse Mergers Using Private Investment in Private Equity (PIPE) Strategies
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| Creator |
DuVal, Charles W.
Quilliam, William |
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| Subject |
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Chinese; Reverse Merger; Reverse Takeover; PIPE — |
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| Description |
A “reverse merger” (RM) has become a populartransaction that allows a private company to take over a publiclytraded firm and obtain their exchange listing. RMs havesignificantly outnumbered IPOs as a mechanism for going publicin the U.S. since 2002. Moreover, foreign firms entering the U.S.have accounted for over 40% of RMs taking place on U.S.exchanges from 2008 - 2013, as compared to approximately 10%of all cross-listings and 7% of all IPOs during the same period.Chinese firms have been participants in 63% of all foreign RMssince 2008. This study is the first to focus on foreign and domesticRM’s use of PIPEs (Private Investment in Public Equity). Whencompared to RMs transacted between two U.S. firms, this analysisfinds Chinese firms who engage in RMs through the use of PIPES(traditional and structured), on average, 1) raise over 400% moreinitial investment, 2) experience higher post-merger marketcapitalization valuations at closing and post-merger, 3) take placeon higher level U.S. stock exchanges, 4) have a higher rate ofsurvival (influenced by sector) and 5) experience significantlybetter short and long-term buy and hold returns.
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| Publisher |
GSTF Journal on Business Review (GBR)
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| Contributor |
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| Date |
2016-10-31
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article — |
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| Format |
application/pdf
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| Identifier |
http://dl6.globalstf.org/index.php/gbr/article/view/1748
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| Source |
GSTF Journal on Business Review (GBR); Vol 4, No 4 (2016): Journal on Business Review (GBR) Vol.4 No.4
ISSN: 2251-2888 2010-4804 |
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| Language |
eng
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| Relation |
http://dl6.globalstf.org/index.php/gbr/article/view/1748/1782
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| Coverage |
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| Rights |
Copyright (c) 2017 GSTF Journal on Business Review (GBR)
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