Compared with ordinary enterprises, the biggest advantage of listed companies is that they can raise funds on a large scale in the securities market, thus promoting the rapid growth of the company's scale. Therefore, the listing qualification of listed companies has become a "scarce resource", and the so-called "shell" refers to the listing qualification of listed companies.
To achieve backdoor listing, we must first choose a shell company, combined with its own operating conditions, assets, financing capacity and development planning. To choose a shell company with appropriate scale, the shell company should have certain quality, not too much debt and bad debts, and have certain profitability and restructuring plasticity. Next, non-listed companies gain a relative controlling position through mergers and acquisitions, and the ownership structure of shell companies should be considered. As long as they reach the controlling position, the merger will be successful.
Problems caused by backdoor listing:
Backdoor listing easily breeds insider trading. Because backdoor listing will lead to a sharp rise in the share price of shell companies, some people who know inside information will buy shell companies' shares for profit before backdoor listing, which constitutes insider trading.
High-priced "shell resources" disrupt the valuation basis. Poorly managed companies may be backdoor. Due to the expectation of backdoor appreciation, the market's valuation of the company is distorted, and the market value of some bad companies is still very high.
Backdoor restructuring is weakened, and the existing delisting system. Due to backdoor reasons, many companies that should have been delisted due to poor management were finally acquired by backdoor mergers and acquisitions, resulting in companies that should have been eliminated.