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post #1 of 7 (permalink) Old 06-19-2008, 07:46 PM Thread Starter
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Any Financial gurus here?

So, reading up on a couple things, and came across this statement:

" filed a shelf registration statement with the Securities and Exchange Commission"


Googled and did a search and didnt find exactly what this is.... basically what im wondering is this :

When a company files a shelf registration statement with the Securities and Exchange Commission, what exactly does that do, why would a company do that, and what benefit does it hold for the company?


From what i gathered here and there it basically puts a hold on some assets and sets them aside for credit purposes? but what i dont understand is why would a company do that and what benefit does it have?

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post #2 of 7 (permalink) Old 06-19-2008, 10:16 PM
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It means they can put everything in place to go public without having to actually go public until they really want to. Without it, it may take too long to go public and they could end up going public at a less favorable time.




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post #3 of 7 (permalink) Old 06-19-2008, 10:28 PM Thread Starter
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Quote:
Originally Posted by GreenBird View Post
It means they can put everything in place to go public without having to actually go public until they really want to. Without it, it may take too long to go public and they could end up going public at a less favorable time.
What if the company is already public and then filed that with the sec?
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post #4 of 7 (permalink) Old 06-19-2008, 10:47 PM
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post #5 of 7 (permalink) Old 06-20-2008, 12:36 AM Thread Starter
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Quote:
Originally Posted by Splattered View Post


Exerpt from investopedia on shelf registration:

"...For example, suppose the housing market is heading toward a dramatic decline. In this case, it may not be a good time for a home builder to come out with its second offering, as many investors will be pessimistic about companies working in that sector. By using shelf registration, the firm can fulfill all registration-related procedures beforehand and go to market quickly when conditions become more favorable. "

Well i understand that, but what if the company is already a publicly traded company and then they file a shelf registration?
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post #6 of 7 (permalink) Old 06-20-2008, 04:19 AM
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Then it sounds like a quick way to create a spin off or baby corp. when the time comes to create a more valuable branch of the company. Can be used as a tactic for window dressing. If a company is fulfilling a contractual obligation by agreeing to have this underwritten this parent corp isn't going to spend 500k and stop the procedure. If market condition suck by the time registration with the SEC is completed the company's spin off or subsidiary will get shelved or sold or used simply as a shell corporation for the purpose of funneling funds into corporate accounts. This is a common way to shelter income from taxes if your shell corporation is paying for its retirement accounts then it gets to match the funds and write that off into tax shelter. These are usually most of under the table reason why a company would do this. A corporation that is publicly traded already has filed with the SEC and conforms to their rules of registration. The company would only need back up registration if it planned a merger or planned to dissolve and reincorporate. Or for buy out reasons. There are plenty of different explanations. You'd have to be specific if you want a better answer. My major is finance. I'm 7 weeks from grad. Glad to be leaving, I didn't learn much anyway. I think this is the best answer I can give. Im not a guru sorry.

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post #7 of 7 (permalink) Old 06-20-2008, 07:58 AM
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Quote:
Originally Posted by musto View Post
So, reading up on a couple things, and came across this statement:

" filed a shelf registration statement with the Securities and Exchange Commission"


Googled and did a search and didnt find exactly what this is.... basically what im wondering is this :

When a company files a shelf registration statement with the Securities and Exchange Commission, what exactly does that do, why would a company do that, and what benefit does it hold for the company?


From what i gathered here and there it basically puts a hold on some assets and sets them aside for credit purposes? but what i dont understand is why would a company do that and what benefit does it have?
Is this reguarding to Circuit City?

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