List Your Company in the States

List Your Company in the States
By William Cate
Published March 2000
[http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]

The alternative to listing your shares on the OTCBB is to list them on the NYSE, AMEX NASDAQ or a Regional American Stock Exchange. The Target Company balance sheet and time argue against using the New York Stock Exchange (NYSE). Target Companies could meet the American Stock Exchange (AMEX) listing requirements with their first acquisition. AMEX has an institutional investor following that NASDAQ lacks. AMEX is owned, but not operated by the NASD. It’s a better choice than NASDAQ. I believe that NASDAQ has the structural problems of the OTCBB/BBX. While I’m willing to work with a Target Company desiring to list on NASDAQ, I strongly advise against it.

The Regional Stock Exchanges include the Boston Stock Exchange, the Chicago Stock Exchange (formerly the Midwest Stock Exchange), the Philadelphia Stock Exchange, the Cincinnati Stock Exchange and the Pacific Stock Exchange. The NASD owns, but does not operate the Phila-delphia Stock Exchange. These five Stock Exchanges are aggressively seeking listings. You can list of any of them for about US$350,000. As with your Target Company SEC registration, the primary costs involve your American attorney’s legal fees. I suspect the BBX will help these four stock exchanges expand the number of listed companies.

The greatest cost in going public is the cost of maintaining your share price. Unlike most sales, the original seller is responsible for finding all the later buyers of their shares. It’s this cost that destroys public companies.

"Follow the Swiss Currency Formula" is the first axiom of a strong share price. Don’t issue shares unless you receive cash-producing assets as benefits. Issuing stock to employees is a terrible policy. If your employees want to buy your stock, let them do so from their stock broker. Paying bills with your stock always costs your Target Company a multiple of the face value of the bill. Your creditor sells your stock and you become obligated to find all the buyers for those shares for the next several years. The cost of finding those buyers exceeds the face value of the bill. At best, the practice defers the bill payment for a year or two.

It costs less to keep your present shareholders than to find new investors to buy your stock. Your investor relations should focus upon keeping your existing shareholders. If you attract shareholders based upon an implied promise that your shares will appreciate in value, those shareholders will sell into that share price appreciation. Your shareholders must share your Target Company vision. You must offer them reasons for keeping their stock. For years, I’ve favored non-cash benefit program for shareholders. Secure discounts and deals on items and services the average small capital investor needs. This can range from fleet buying of cars to cruise ship discounts. Try to ensure that the non-cash discounts equal the value of your shares to the average shareholder every year. If you do so, very few of your shares will enter the Market.

Remember that stocks are sold, they aren’t purchased. This means that you have to find and pay people to sell your stock. There can be no assurance that the Investor Relations staff you contract to use can sell your stock to anyone. Over a decade ago, an extremely successful American Investor Relations firm attempted to promote their stock. Their effort failed, badly. Almost nobody purchased their shares. They used techniques that had worked for their clients. If an Investor Relations firm can’t be certain to create buying for themselves, you can’t be certain they can create buying for you. Even if they can’t sell your shares, you will pay dearly for their efforts.

As with many things in the Financial Industry, Investor Relations costs are often set by the ignorance of the buyer. Be certain that you aren’t being charged far more than the marketing service costs other public companies. Define your target market for shareholders as long term investors. If you attract the small capital speculators that populate the OTCBB Market, they will sell into any share price appreciation. Why have them sell your shares at a high price to long term investors? Let the shareholder who will support your company profit most from your Target Company vision.

Small Capital Investors buy shares motivated by greed. However, that greed must have a credibility component with it. The best credibility component is the investor’s ability to buy the Target Company’s product or service in their local area. A company selling something they can buy is credible.

I believe that American Small Capital Investors make unlikely long term investors. I think the Investor Relations techniques used in the United States are not as effective with American investors as they would be else-where. The reason is that the American public is over exposed to effective marketing techniques. In most of the World, the local population distrusts the local currency. They tend to unwisely trust the American Dollar. This viewpoint is a major reason that the GRCM works outside the United States. Owners of cash-producing assets want payment in American Dollars, not the local, restricted currency. The principle applies to potential long term shareholders in these countries. It would simply be a variant of the Five Step Path tactic. For these reasons, I’d advise Target Companies to target their Investor Relations efforts within their own region. They are credible to investors because their product or service can be found locally. They are more likely to respond to an Investor Relations appeal. They may want to hold their assets in American Dollar denomi-nated securities. It costs less to run an Investor Relations program outside the United States. The Internet gives all investors and shareholders adequate access to relevant stock information.

It costs money to be able to print your own money. The costs are worth it, if you use your shares to build your company. The potential leverage will compress the development of your into an acquisition target to a few years. It will leverage your company’s value because your Target Company will be valued in American Dollars at Market Capitalization (Share Prices times issued shares).

To contact the author: Visit the Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit the Global Village Investment Club Website:
[http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]