What are the risks associated with reverse takeovers in the digital currency space?

1 answers

• Dec 26, 2021 · 3 years ago
  Reverse takeovers in the digital currency space can pose various risks for investors. One risk is the potential for scams and fraudulent activities. Since reverse takeovers involve private companies acquiring publicly traded companies, there is a risk that the acquiring company may be a fraudulent entity seeking to take advantage of unsuspecting investors. It is important for investors to thoroughly research the acquiring company, including its management team, financials, and track record, to minimize the risk of falling victim to a scam. Additionally, reverse takeovers can result in a dilution of existing shareholders' ownership. If the acquiring company issues new shares as part of the reverse takeover, the existing shareholders' ownership percentage may decrease, which can negatively impact the value of their investment. Investors should carefully consider the potential dilution effects before participating in reverse takeover transactions.
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