A/S info and Cross-Listing Motivation July 5th
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A/S info and Cross-Listing Motivation
July 5th 2011 Financing " Loan HELP " button appeared on Tytan's website
>> Financing Options Application PDF Form / Loan CalCulator
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Authorized Shares Increase Possible Reasons:
The first reaction of many is the hated DILUTION scare.
But the Board of Directors may have other valid reasons to increase the Authorized number:
1. To use as collateral for capital financing, lines of credit &/or loan programs
2.To reserve shares for options/warrants.
3. To raise capital for expansion.
4.To expand the product line through acquisitions.
5. To establish strategic relationships with other companies. (Dealers & Distributors)
6.To provide equity incentives to directors, officers, employees, consultants.
7.To create an employee stock ownership plan.
8.To protect the company from hostile takeover.
9.To use as a means of establishing subsidiaries based upon patents
10.To provide as restricted's for partners in JV programs.
11. To use for Cross-Listing shares on a foreign stock exchange that can lead to increased stock liquidity and a decrease in a cost of capital .
12.The most hated is used to scam investors in diluting for no other purpose than to fill the ceo's pockets.
The How and Why : " Cross listing " can lead to increased stock liquidity and a decrease in a cost of capital. Cross listing of shares is when a firm lists its equity shares on one or more foreign stock exchange in addition to its domestic exchange Examples include: American Deposit Receipt (ADR) European Depositary Receipt (EDR), International Depositary Receipt (IDR) and Global Registered Shares (GRS) .
( Study ) ...finding suggests that the stock market expects the cross-listing to have a positive impact on firm value .Doidge, Karolyi, and Stulz (2004) [5] show that companies with a cross-listing in the U.S. have a higher valuation than non-cross-listed corporations , especially for firms with high growth opportunities..."
> The Basics Of O/S - A/S Shares & Float
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A share issued and registered in multiple markets around the world. Global registered shares represent the same class of shares. Also known as a " global share ". These shares are issued in the U.S. and registered in different countries , thereby making them foreign securities. They provide shareholders across the globe with equal corporate rights. Global registered shares should not be confused with American depositary receipt (ADRs) or Global depositary receipts (GDRs), which are domestic securities representing a foreign (outside the U.S.) interest.
Meeting with Chinese Stock Market Officials , who invited Mr. Leonard due to his long and fruitful business relationship with the Chinese tractor industry. as seen in the 2011 Q1 QUARTERLY REPORT on Page 16 and in the GlobalTimes News Articles
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Mark is sitting next to the President of Factory #2 . On the other side of the President are three Government people here to see what Mark says about his tour of the new factory today and to discuss work that will be planned to make this factory to be the BEST accepted Tractor in the USA . This factory builds the MOST POPULAR tractor in China with Commercial Farmers. When cosmetic plans are completed, in about 8-12 months, it is felt by many that this will be the most sought after tractor in the USA/CANADA . This tractor was also the cornerstone tractor in Mark's first tractor company, Rhino. When re-introduced with MODERN cosmetics, it will again be the strongest and most reliable tractor sold anywhere.
> Mark sitting next to Gary Lynch (left) & Tim Nelson of Farm Boys Tractors Sitting on the opposite side of the Dinner table (right) (picture from there visit to China in May 2011 )
$TYTN
The academic literature has identified a number of different arguments to cross-list abroad in addition to a listing on the domestic exchange. Roosenboom and van Dijk (2009)[1] distinguish between the following motivations:
Market segmentation
The traditional argument for why firms seek a cross-listing is that they expect to benefit from a lower cost of capital that arises because their shares become more accessible to global investors whose access would otherwise be restricted because of international investment barriers.
Market liquidity
Cross-listings on deeper and more liquid equity markets could lead to an increase in the liquidity of the stock and a decrease in the cost of capital .
Information disclosure
Cross-listing on a foreign market can reduce the cost of capital through an improvement of the firm’s information environment. Firms can use a cross-listing on markets with stringent disclosure requirements to signal their quality to outside investors and to provide improved information to potential customers and suppliers (for example, by adopting US GAAP). Also, cross-listings tend to be associated with increased media attention, greater analyst coverage, better analysts’ forecast accuracy, and higher quality of accounting information .
Investor protection ("bonding")
Recently, there is a growing academic literature on the so-called “bonding” argument. According to this view, cross-listing in the US acts as a bonding mechanism used by firms that are incorporated in a jurisdiction with poor investor protection and enforcement systems to commit themselves voluntarily to higher standards of corporate governance. In this way, firms attract investors who would otherwise be reluctant to invest.
Other motivations
Cross-listing may also be driven by product and labor market considerations (for example, to increase visibility with customers by broadening product identification), to facilitate foreign acquisitions, and to improve labor relations in foreign countries by introducing share and option plans for foreign employees.[2]
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