Hi all,
I was reading through this article:
http://www.nasdaq.com/article/masonite-international-withdraws-ipo-appr…
-- and was not sure I understood the process.
The link basically says that the company did not go through/withdrew from an IPO -- but was still listed on the NYSE and started trading. Could someone explain the mechanics of this?
Don't you need an underwriter and a process?
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You can list shares on a stock exchange without offering new shares to the public at the same time. Presumably some company insiders will sell some of their existing shares to the public. Hence the company stock is now publicly traded without share dilution. Without knowing much about the specific situation here I guess this might be what is happening (I do know that Masonic was publicly traded before, bought out by KKR via a LBO then went bankrupt and was restructured) The company can always decide to do secondary equity offerings later on now that it is already on the exchange.
Also many companies go public via a reverse merger, e.g. having the operating entity acquired by a shell holding corp then list the holding corp. A reverse merger listing does not come with IPO. Instead they raise public equity with secondary offerings and PIPEs. This was a very popular practice among Chinese companies going public in the U.S. They set up layers of shell companies offshore and in DE that own the onshore Chinese entity, turning it into a Wholly Foreign Owned Enterprise (WFOE).
Reverse mergers are covered above. Form 10 is another way. Typically something like this:
File form 10, SEC reviews, it becomes effective, meaning now you have to start filing 10-Q's and K's and other required disclosures.
Typically then you do a retail private placement and list on the OTCBB
During all this time you're doing whats called a Non Deal Roadshow or NDRS. This is when you get in touch with ER analysts at investment banks who introduce you to buy-side firms and get your story out there much like a regular IPO roadshow.
Once the buy-side has gotten to know your story you do an institutional private placement or confidentially marketed public offering or CMPO
Then once you're ready you up-list to usually the Nasdaq since its typically small high growth companies who go form 10 and often you'll have a more traditional public offering to go along with this
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