Initial public offering in which the operating business – i.e. the actual production of goods or the supply of services – of an unlisted company is transferred to an inoperative but listed shell company (listed shell company that has no operations). For this purpose, the majority of shares in the dormant shell company is purchased in a first step. – The then convened general meeting subsequently resolves on a capital increase by means of a non-cash capital contribution, namely the purchaser’s company. At the same time – the articles of association (bylaws) of the shell company are adapted to the new purpose of the company and possibly also – the name of the joint stock company is changed. – A company that slips into the shell of an already listed joint stock company avoids the bureaucratic effort connected with admission to an exchange. Legally, cold IOP is permitted. However, regulators follow cold IPOs very closely. This is because the revival of a shell company often creates the appearance that the old business of the original corporation is being resumed (that the listed shell company is being revived), which experience shows then leads to a price increase that is not objectively justified. – See Initial Public Offering. – Cf. BaFin Annual Report 2007, p. 181 f. (prosecution of manipulative cold IPOs) as well as the respective BaFin Annual Report, chapter “Supervision of Securities Trading and Investment Business.”
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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