Alternative public offering
What is an alternative public offering?
An alternative public offering is when a reverse merger is combined with a private investment of public equity. It offers companies a substitute for an initial public offering (IPO).
Where have you heard about an alternative public offering?
Heinz, Hilton Worldwide Holdings and Dell computers are all amongst companies that were private and have since gone public. Burger King has had two IPOs the first in 2006 and the second in 2012. It is now again a privately owned company.
What you need to know about an alternative public offering.
There are many benefits to a company becoming public, but most notably it makes an exit strategy available for investors. If trading in a public market, investors have the ability to sell their stock at any given time as long as it has been deemed tradeable. Thus, hopefully, they are able to make a profit rather than a loss from the sell. This is not possible when trading in a private market unless the owner or controller of the company allows an exit strategy.