What flavor of fraud might this OTC malarkey be propping up?
"If you are a company — particularly a Chinese company — that would like to be publicly traded in the U.S., but that would prefer to avoid the scrutiny that comes with an initial public offering, doing a “reverse merger” — acquiring the empty shell of a near-defunct but public U.S. company — is often an easy way to do it."
It's like posting about how some scamcoin is a scam and so people run out to buy the scamcoin.
Though it's probably more like "$15 on a meme stock is nothing".
> People occasionally conflate these shell-company reverse mergers with the current boom in special purpose acquisition companies, but they are really very different. A SPAC goes public and raises money specifically for the purpose of taking a private company public; it sells shares to the public and then has a public vote with a lot of disclosure to complete its merger. A reverse merger generally involves a public shell of a more or less defunct operating company (or at least one that pretended to have operations); the shell will be fairly closely held by a few insiders, and there will be no real money inside it. It is not a high-profile way to go public and raise money, the way a SPAC is; it’s a low-profile way to sneak into the public markets.
Wouldn’t surprise me if they have another run at it considering how many new retail investors there are today and the froth in the market
It's probably because I'm re-watching the Sopranos but sounds like a more fun answer than pump and dump would be a front company. Dirty cash -> sandwich -> corp money -> consulting corp money. In that fantasy would be weird to not report more revenue. Plus added opportunity to flip the corp into a merger like the article says which sounds more likely.
Though the SEC probably won't like a takeover with a RICO indictee as owner ;)