4 ms·
Big private company wants to trade shares publically but doesn't want to go through the whole process of an IPO... so the big private company buys a smaller pub
by auspex 8y ago
Big private company wants to trade shares publically but doesn't want to go through the whole process of an IPO... so the big private company buys a smaller publically traded company. Now big company has "merged" is a publically traded company.
- asaph 8y agoIs this considered a loophole in the system?
- appleiigs 8y agoNo, it’s a well known maneuver. Was popular in the past few years to reduce taxes. From an Washington Post article: “The idea behind the business maneuver, called a corporate inversion, is simple: a U.S. company merges with a foreign one and moves its headquarters abroad, avoiding the high U.S. corporate tax rate of 35 percent on foreign income”.
- tdhoot 8y agoTo be clear, a corporate inversion is generally used to reduce taxes. I believe when you're simply doing it to avoid the IPO process it's just called a backdoor listing.