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Forgive a fringe question. Bridge Loans for IPO situation.
I have been approached about a bridge loan that gives stock and
12%interest for
a 120 day loan, and lets you buy stock at less than the going rate , and
gives you
an amount of stock equal to your loan ( restricted for 2 years )
Is this the way bridge loans work??
Sounds to good -
Anyone with experience along these lines.?
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Yes, this is the way it works. the "Bridge Loan" is a source of temporary
financing to the company that is going public. It could be used for a
number of reasons. You would want to find out what the loan is for. Of
course if the Initial Public Offering runs into trouble you might risk
losing your investment. I would check the history of IPO's by the
underwriter. You would want to see that their underwriting's have been
successfully supported in the aftermarket. Above all contact an Attorney
with IPO experience and specifically "Bridge Loans". Not to scare you off
this can be an extremely lucrative situation, just check out the
background of who you are dealing with. The NASD might be able to
provide you with some additional guidelines for "Bridge Loans"
Good Luck
Ron McEwan
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