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Going public through the backdoor

Definition:

The process by which a company comes to have publicly traded shares without an IPO. This could happen through a reverse shell merger, or through acquisition of a public company and offering shares to previous owners. Another way is through a series of private placements, selling shares on an exchange to institutional and other sophisticated investors.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Sell-side analyst

A financial analyst who works for a brokerage firm and whose recommendations are passed on to the brokerage firm's customers. Also called Wall Street analyst.

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