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I spent a few years with a small regional ipo underwriter and market
maker in syndicate and due diligence. If the deal is legitimate there
will be several things for you can check into. One will be the best
efforts agreement with the underwriter. Of course the deal will sound
good. They all do on the surface. There are many things that can happen
before it is sold, if ever. Better look at this with a fine tooth comb.
This is one area where unscrupulous promoters are out there in big
numbers.
It is a high risk, high reward arena, not for the novice because of the
deceptive nature of many deals and lack of credible management. Cures
for cancer, aids, high tech, new consumer products are all favorite
target areas. Also watch out for the amount of insider stock and
restricted that is promised or already out.
There are a hugh number of deals out there, many more than get funded,
so, "cavet emptor", let the buyer beware. There is a very small chance
that you are inside on something good as most of the time if it is the
money is already there for it with the underwriters investors or insider
network. If it is not and they are soliciting retail,watch out.
JD
Michael E. Strupp wrote:
>
> > >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.?
> > >
> > >Thanks
> > >rcb
> > >--
> > > We create our society every time we interact with someone.
> > > What kind of society did you create today?
> > >
>
> RCB --
>
> I'm interested in finding out who offered you this opportunity: was it a
> cold caller, a business associate, a "friend of a friend", who? What was
> the name of the brokerage house and what was the name of the company
> looking to go public? I wonder if I ever heard of them ....
>
> Thanks.
>
> Mike
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