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In a reverse merger, a privately held company purchases a publicly held company and, as part of the new entity, becomes public without an initial public offering (IPO).
It's described as reverse because in the more typical merger pattern a public company purchases a private company to expand its business.
- Browse Related Terms: Floating an issue, Go public, Gross spread, Hot issue, Lock-up period, New Issue, Offering date, Offering price, Oversubscribed, Reverse merger, Secondary offering, Startup