Publicly Traded Target Companies

searcher profile

October 29, 2023

by a searcher from University of Oregon in Washington, DC, USA

Does anyone have any thoughts on targeting a publicly traded company?

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commentor profile
Reply by a professional
from The College of New Jersey in La Verne, CA 91750, USA
^redacted‌ TCNJ graduate here too! Good to see fellow alum on here.

I am not a searcher - full transparency. However, we have a lot of clients who are publicly traded with low market caps that currently struggle with reporting requirements, cash burn, and are in painful positions with some of the bridge financing they've picked up in recent years. They spent a lot when money was loose and available to prepare for growth and have strong management teams, seemingly good products, etc. but now a limited path to commercialization without additional funding to help with marketing products, finishing development, establishing manufacturing capabilities, etc. These are more like VC investments, so are a bit different than the typical searcher target. However, from my perspective this segment of the market seems to have been over sold due to financial risk factors and generally negative investor sentiment toward growth-focused investment these days. Just my $0.02 based on what we've seen recently in the lower middle market public co space.
commentor profile
Reply by a professional
from The College of New Jersey in La Verne, CA 91750, USA
All great points on this post - your target needs to be the right company and you need to get the transaction done the right way. Everyone is sensitive at these micro-cap companies with stock prices having taken a nose dive. No one wants to recognize (both mentally and on the books) that they'll have to take a massive loss on their investment whether that be their dollars invested or their stock options received as compensation for employment. Great post.
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