What is backdoor listing?

Backdoor listing means that private companies gain a certain degree of controlling rights by injecting assets into listed companies with low market value, and use their status as listed companies to list the assets of their parent companies. Usually shell companies change their names.

To put it bluntly, backdoor listing means that a listed company obtains a controlling stake in a listed company through acquisition and asset replacement, and this company can raise funds by issuing additional shares of listed companies, thus achieving the purpose of listing.

Extended data:

Starting from 1934, the United States began to implement backdoor listing, which became more and more popular because of its low cost and high success rate. During the economic recession, the income of many listed companies decreased and the market value dropped sharply, which created opportunities for other private companies to use this "shell" to go public.

In recent years, with the economic reform and opening up in China, many enterprises want to go public overseas. However, due to political factors and complicated procedures, some enterprises will choose to acquire some shell companies in the United States and list them on Nasdaq or new york Stock Exchange. After the bursting of the internet bubble, many internet companies are on the verge of bankruptcy, and their market value is extremely low, which creates more opportunities for backdoor listing.

References:

Baidu encyclopedia-backdoor listing