The Research On Reverse Merger In The U.S. By Chinese Private Enterprises And Case-study

At present, many distinguished Chinese enterprise with perfect prospect and excellent accomplishment with capital needs are difficult to go public due to the strict approval system in Chinese security market. There are over 3,000 enterprises waiting for listing while only 100 of them can achieve every year. Furthermore, privately-owned enterprises are even more difficult to be listed due to policy restriction. Because of the small scale of domestic stock market, state-owned medium and small enterprises are hard to go public, not mentioning those privately-owned ones. As the globalization of economics, more and more entrepreneurs are turning their views to oversea capital market, esp. the US market with the most abundant financial resources in the world.There are three main security markets in the U.S., New York Stock Exchange (NYSE), American Stock Exchange (AMEX) and National Association of Security Dealer Automatic Quotation (NASDAQ), plus the Over The Counter Bulletin Board (OTCBB), which was specially set up for medium and small enterprises. Many enterprises get listed here first and obtain capital support and they will upgrade to AMEX and NASDAQ.More and more privately-owned enterprises trends to go public visa reverse merger in OTCBB market of America. There are a lot of successful cases along with fund-raising and market-upgrade among them. But it is not all the case. Some enterprises haven't approached the funds and the stock prices suffer a disastrous decline although they succeed in listing. So there come the questions, if the American OTCBB market a sweet cake which deserves pursuing by Chinese companies and what kind of enterprises are fit for go public in OTCBB market and how? The paper aims to solve the problems through theoretical and empirical analysis.Based on this phenomenon, the paper expatiates on the motivation, characteristic and details of the behavior of listing visa reverse merger in the firstthree chapters. In ChapterlV, the paper extracts two typical cases and analyze the successful and unsuccessful experience, and characteristic of the enterprises which upgrade to the three main capital markets of America in three different ways, which helps the privately-owned companies to set up a correct mind of going listing visa reverse merge. Finally, the paper draws a conclusion.