WestPark Capital Financial is an aggressive firm that has been involved in reverse mergers for Chinese companies.
Investors are increasingly wary of such listings, including reverse mergers with shell companies.
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Gerstein will be tweeting his commentary and fielding your questions about low-priced stocks, his current picks, Chinese reverse mergers and more.
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Pegasus, best known for its wireless Ethernet bridges, is the amalgamation of several reverse mergers and several partial acquisitions in the last few years.
The attractions of this maneuver are clear: respect back home, access to capital here and the relative ease of reverse mergers in the States.
Reverse mergers are not listed in the Wall Street Journal.
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Reverse mergers are a way for small private companies to obtain U.S. listings without going through the more rigorous methods of going public, such as an initial public offering.
It seems the FBI was also interested in the purveyors of reverse mergers and last week they searched a firm which specializes in these transactions, New York Global Group.
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While no one tracks reverse mergers, a half-dozen companies from the Middle Kingdom--ranging from health care products to manufacturers of power-steering assemblies (see table, p. 44)--havecompleted them since last year.
Exchanges that list reverse mergers, such as NASDAQ and NYSE Amex, have delisted or halted trading in at least a dozen stocks (some of which still trade in over-the-counter markets).
The short sellers moved in and with their success in uncovering a number of transparency and accounting issues at these reverse mergers, were able to drive down the prices of quite good companies with no problems, reasoned Williams.
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