FSE Listings- How to raise real money on the Frankfurt Exchange with active trading markets and why Equity Lines of Credit do not work for Newly Listed Firms

Wednesday, December 21, 2011 @ 03:12 PM
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FSE Listings- How to raise real money on the Frankfurt Exchange with active trading markets and why Equity Lines of Credit do not work for Newly Listed Firms

The Frankfurt Stock Exchange – Deutsche Boerse Group trades over 14 trillion euro in securities and has the ability to offer a very liquid marketplace. However, for newly listed firms, the liquidity comes slowly overtime and a proper FSE Listings public relations strategy. Trading on the Frankfurt Stock Exchange is not like trading within the US OTCBB, where many tools like equity lines where invented. These mechanisms do not work on newly listed firms as the market maker structure in Frankfurt is different than the US and Australia, but most Equity line and Listing firms don’t really know how “TRADING ON FRANKFURT” works, therefore, if someone sold an equity line to your firm, do not expect the funds immediately after listing. Funding from these types of mechanisms only can occur when the provider can sell shares into the market to finance your firm.

My biggest fear with new companies is that they sign on for equity lines, debentures, bridge loans, and or even some are so naïve to give up 5% of their business to the firms that list them… once the firm lists the stock that gets sold into the market makes your company worthless. As active trading the FSE Listings market is, if someone hits the bid of the market maker, the company becomes liable for the trade, the market maker orders the firm to pay their open positions, and the company gets delisted if they don’t have the funds to cover. Thus, active trading and equity lines do not work on the Frankfurt Stock Exchange for new companies.

No matter the mechanism, check what they are selling you with us first! Most time their proposals lack the details of the final documents or the final documents hide how you “Default” the day you sign on. Many of these types of funders started in New York on the Pinksheets and OTCBB, however, they now operate in
Australia, Hong Kong, Brazil, Vietnam, the USA, Canada, and are aggressively targeting firms wanting to list in Frankfurt.

There are ways to produce active trading:

  • An investor awareness campaign to sophisticated investors via online marketing
  • Press Releases and good news
  • Releasing financial data that is audited and prepared for public disclosure
  • Building a Prospectus and delivering the prospectus to institutions
  • Performing a roadshow
  • Newspaper and Print marketing of the companies reputation

On average for every 1 euro you spend in public relations your firm will see 2-3 euro in market trading and interest.

If we use the 3 to 1 ratio as the real ratio (I have seen firms claim to do 10-1 ratio, but these
firms generally can’t even do 0-1).

If you have an equity line of credit and begin a campaign with 100,000 euro invested, you will see 300,000 euro in market activity. Under most debentures and equity lines, over the first 15 day period the financers generally go by a lowest bid price average over 15 days prior to drawing down or asking for funds. During the first few days of that time they would have shares, thus they probably sold into this market, at least 1/3 of the trading which is stipulated in their contracts which is equal to 100,000 euro they now have. This sale would drive the share price down back to 10 cents for example. Over the next 15 days they are required to assess the market again to finalize your payments.

Day 1: They sell additional shares into the market, but the market cannot hold up 100,000 shares sold because the 3 to 1 marketing is not strong enough to hold up large blocks of shares being sold in the market, the bid drops from 1 euro to 10 cents euro.

Day 2-15: The shares in hand, the financer is capable of holding the lowest bid price and daily close at 10 cents.

The request for funds from the equity line would be the first 15 days of 1 euro averaged with the last 29 days of 10 cents in concept. However, any block of shares sold outside of their block would have to have come from a “blacked out” seller or any shares sold over a certain size. So the contract defines that you basically get 12.6 cents euro on the dollar of the 100k euro sold into a market you paid 100k euro for. Thus, you get 12.6k for the 100k in shares you gave the equity line provider. With the pressure of stock sales in your market from financer’s holding shares, it is almost impossible to sustain your share price and “volume” at the same time over a 30 day period as per the documentation as a newly listed Frankfurt Company.

The reality is, do not give shares to investor relations firms or firms who claim to list you and do investor relations, you will get pennies on the dollar if they pay you at all.

Many of these firms attach upfront fees paid from the funds they get from selling your stock, thus the chances of you seeing any money is low, and the chances of you destroying your company is high. If you want me to explain your equity line of credit and how it may be a death trap for your firm, contact myself Mark Bragg, info@fselistings.com and send over the agreements for us to review for free and tell you where they get you.

How to RAISE REAL MONEY on the Frankfurt Stock Exchange!

Real money on the Frankfurt Stock Exchange is about validation and credibility. Thus, FSE Listings Inc utilizes a team of valuators and management valuation firms who are certified to analyze firms, give real money values, and certify these values. This valuation can be used to make up the information in the Business Plan, Information Memorandum, Prospectus, and Bond offerings. In addition, the valuation can be sent through our network of USD $100 billion in institutional investors who may be interested in equity, bonds, and debt offerings.

When your firm lists on the Frankfurt Stock Exchange, don’t use a firm claiming to be a Law firm or Capital Firm, use FSE Listings Inc, the largest consortium of top professionals, giving the top service and the best prices. Two and three person operations may look professional, but they are only racking up the fees for their own benefit, and their intent is generally not to stay around. Our consortium gives access to leading providers in public relations, bond offerings, valuations, prospectus writing, business plan and IM writing, listings, market making, investor relations, legal advice, accounting and auditing, website development and social media for public companies, roadshows, adjusting market caps on the FSE, access to registered FSA broker dealers, German Broker Dealers, Canadian and US broker dealers and exposure through our 1 million unique visitors per month. In addition, our Sophisticated and Qualified Investor Register allows for opt-in interested subscribers to choose to get the valuation report and documents on your company to contact and access your firm directly for more information! With over 5.8 million subscribers and 400,000 self-certified sophisticated investors in our partner’s subscription base, your
firm has an immediate access to the potential of the most powerful investor relations available to only firms listed by FSE Listings Inc.

Utilizing the right tools, you can raise capital for your firm.

We suggest not to fall into the trap that other firms offer, we suggest you list your firm through www.fselistings.com, info@fselistings.com first and then:

  • Build a Bond of which is financed within 20-30 days of listing for up to 5 million euro
  • Build the documentation for more institutional investment with part of the funds
  • Raise equity funds through public relations, roadshows, and other financing mechanisms or issue additional bonds for expansion and acquisition

Our proven method of financing will list your company in 4-6 weeks and then get real money into your firm to operate with!

In order to know what your market capital will be and have the proper valuation on your firm, please contact info@fselistings.com today and we will collect your company information and inform you how fast you can list, how much money you can raise, and when we can start working with your firm!