Lower PPS Better Reg A+ Performance? [Guest Post]
Guest Post By: Steve Csikos and David Van VortReg A+ seems like a shortcut to get listed on the main board when institutional investors deny funding early stage ventures!
What can you do if the book value is too low to gain investors’ trust? Find new investors!
This is where Reg A+ creates an opportunity to find, not only a few but, a whole crowd and convince them to look at the intrinsic book value/ future book rather than current book value.
Thanks for this scenario, several issuers have now made it to Nasdaq & NYSE American in 2017; still, 7 of those 8 companies ended the year with a share price lower than their IPO price.
Looking at the IPO price for these listings one can conclude the lower you start the better success rate you get. Traders/the market wouldn’t value these companies better than penny stocks so they ended up under $5!
When you are early stage public company you are considered high risks and might not get the attention of traders/brokers that wouldn’t touch penny stock by policy!
As early stage even when you IPO above $5 so your company doesn’t fall under penny stock rules you end up in the hands of “penny stock traders”. This is not the usual crowd looking at AAPL at $900 but favor stocks with a greater upside – the next 10 bagger- as they put it!
High pps is not always best for the market even AAPL lowered their trading price by now to reach a greater variety of traders.
In fact, it is best to call your company what it is and IPO as a penny stock until you can generate better publicity and performance compared with good standing profitable companies.
The crowd for the early stage is changing rapidly and though Reg A+ has been a great alternative time will tell if another year of failure might only strengthen the case for ICO investors hoping for the next best thing!
About Steve Csikos and David Van Vort (Wall Street 101 mentor)
Steve is the main Partner of the Agem Group on Wall Street, advising our clients regarding IPO financing solutions in the most liquid regulated capital markets of the USA. Steve also advises public as well as private companies from the USA and Asia regarding European investor relations and expansion capital opportunities available for our overseas clients at Agem.
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