What is backdoor listing?
The so-called backdoor listing means that the unlisted company obtains the control right of the listed company through acquisition and asset replacement, and then gradually injects assets into the listed company, thus realizing the purpose of listing the company.
Backdoor listing can be said to be a shortcut for the company's stock listing. Because if you want to apply directly to the regulatory authorities for listing, you may need to queue for a long time. After all, there are many companies applying for listing in this way, and regulators need to control the pace of listing new shares, so even if they queue up, it will take a long time to get listing opportunities.
Backdoor listing does not need to queue up, as long as you get the control of the listed company. If it goes well, the time to go public can be much less than before.
However, although backdoor listing is a shortcut, it is not easy to implement. First of all, high-quality shell resources are not easy to find. The so-called high quality shell resources are not high quality listed companies.
In fact, listed companies that can backdoor are basically companies with big problems, and high-quality companies generally do not agree to backdoor. However, it is risky to borrow a company with problems. Many companies with problems are not qualified to be shell resources at all, because the pit is too big. So it is not easy to find high-quality shell resources.
Secondly, the cost of backdoor listing is relatively high. Because if you want to backdoor, you must first obtain the control right of listed companies, and to obtain the control right of listed companies, you may need to pay a high premium, or give the company a lot of high-quality assets.
Thirdly, the review of backdoor listing by regulators is not lower than that of direct application for stock listing, and may even be stricter.
Because of this, although backdoor listing is a shortcut, there are relatively few companies that can really go public in this way.
So, is it good or bad for a company to go public through backdoor?
Is backdoor listing good or bad for stocks?
First of all, it is definitely good for companies that have been backdoor. Because the general backdoor companies are problematic companies, and even stocks may be delisted at any time. Without the help of external forces, it may be difficult to climb out of the quagmire and eventually be delisted.
After being backed by a backdoor, you will be injected with a large number of high-quality assets, which will make the company instantly rejuvenate and even come back to life. Therefore, after a company is backdoor, its share price usually rises sharply.
Secondly, there are good and bad companies listed through backdoor. The advantage of backdoor listing is naturally that the company can quickly obtain the financing right in the stock market, and at the same time, it can push up the company's valuation and make the stock easier to realize.
The disadvantage of backdoor listing is that the cost is too high, and it also bears the risk of taking over a mess, and may even be worth the loss in the end.