By Richard Lowe, The National Marijuana News
The Challenges of Going Public Via a Reverse Merger
As an investor, you are always searching for value.
How do you define value? Well I suppose that is unique to each investor, but what most equity investors are typically searching for is an undervalued asset.
I recently wrote about the well thought out business plan of Biome Grow before they went public by way of a reverse merger. You can find them on the CSE under symbol BIO.CN. For United States based traders, you will find them on the OTC under ORTFD.
Biome is run by Khurram Malik, a financial advisory specialist that helped many well known cannabis companies (Tweed, Organigram and Mettrum to mention a few) attain their initial funding. He is a practical numbers guy that believes in business efficiency above all else, based on my research so far.
Biome Grow’s business plan is sound and they now have the infrastructure to blossom into a top global cannabis company, which I will review shortly. However, after their stock started trading on October 10th, opening just under $2.00 a share CAD, it has lost more than 50% of its value trading now just over .80 cents. It did not catch much of the general uptrend in cannabis stocks that started at the beginning of November either, though now the rest of the sector has fallen back off and is challenging support once again.
The only logical reason for Biome’s share price to fall off so sharply, right after it began trading, is that nobody knows about them. It is the danger any company must accept when going public through a reverse merger, as opposed to an initial public offering (IPO). IPOs can receive a tremendous amount of publicity before getting listed, including the ringing of the bell to start the first trading day…