Great conference!
By David Feldman at 19 June, 2008, 8:31 am
Just left (a little early) the 2-day reverse merger conference here in Los Angeles. The turnout was tremendous, participants interested, and our sponsor booth got a lot of traffic! Thanks to so many of you who came up and mentioned not only reading the book but being regular blogees.
It does appear our industry is healthy and growing. One attorney panelist asked, “Why don’t we do small IPOs anymore?” I answered, “Because all the underwriters who did them are gone, and this is a great alternative for companies that can benefit from a public trading stock.” I went on to say that if IPOs were cheap, simple, quick and assured, reverse mergers might not even exist. But IPOs are none of the above, and as a result our industry exists.
Some highlights of the conference for me:
1. The friendly “spat” between Tim Keating and me about whether the new “evergreen” requirement, mandating that any former shell’s shareholders cannot use Rule 144 if the company has not been current in its filings, is an unmitigated disaster or just an annoyance that was unnecessary but not the end of the world (I took the latter view). I will be writing more on this soon as I am in the process of interfacing with the SEC on something relating to this issue. Tim and I agree that these changes make a self-filing a more attractive option than previously.
2. If the 2000 election was all about “Florida Florida Florida,” the subheading here may have been “China China China.” There were some great panels on today’s issues, which include some real challenges while strong opportunities remain.
3. A fascinating academic study of hundreds of reverse mergers from 1996 to today with some interesting and a few head-scratching tidbits.
4. My partner Joe Smith on a panel regarding financing and the challenge of building liquidity. His point: investors putting money into reverse mergers need to understand that they will likely be holding their stock for 1-2 years. Those who want near-term liquidity have mostly gotten out of the reverse merger game.
5. My panel on the pros and cons of Form 10 shells including a presentation by Rick Rappaport of WestPark Capital on his now famous “WRASP” structure to take a company public by merging with a virgin shell and trading directly to the American Stock Exchange.
6. The humanizing moment when the adorable young son of one of my competitors (in full tie and jacket) told the panel during the Q&A that he is happy because the stage is clean, and when he has been at other meetings like this the stage is always dirty. Warning: might just have to bring my 6-year old next time!
7. Good networking and good food at the Millennium Biltmore Hotel. And I spotted a few folks taking that victory lap around the hotel I spoke of in an earlier entry…
Heading home!
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