What is reverse merger?

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A reverse merger (also known as a reverse takeover or reverse IPO) is a way for private
companies to go public, typically through a simpler, shorter, and less expensive process.
A conventional initial public offering (IPO) is more complicated and expensive, as
private companies hire an investment bank to underwrite and issue shares of the soon-tobe public company.

When acquiring company is weaker or smaller than the one being gobbled up, this is
termed a reverse merger. Typically, reverse mergers take place through a parent company
merging into a subsidiary, or a profit-making firm merging into a loss-making one.