"There is no constant situation in the army, and there is no constant shape in water. Those who can win by changing the enemy are called gods." Faced with the multiple attacks of stricter supervision, tight funds, and market wait-and-see, many listed companies have begun to "take risky moves" and put on a "playing dead" posture: changing shells to protect shells, suspending trading for a longer time, and putting old wine in new bottles, trying to rely on "capital illusions" to resolve business crises.
American Goheal M&A Group
They thought they were performing "rebirth techniques", but in fact they were playing "three tricks".
These three tricks are nothing else but - changing shells, suspending trading, and telling new stories. A set of combined punches, on the surface, is mergers and acquisitions; in essence, it is "extending life and saving oneself". So the question is, can such mergers and acquisitions really turn around? How many investors and entrepreneurs have been blinded and strayed into the minefield?
As a professional institution focusing on global mergers and acquisitions and capital structure optimization, Goheal is accustomed to this kind of "life and death" capital routine. Today, we will take you to unveil the curtain of these "capital restructuring tricks" and see who is using these three axes and why they frequently fail.
The first axe: changing the shell, what exactly is it in return?
"Changing the shell" is almost the first reaction of all "blood-losing" listed companies in their struggle. If the shareholders are not doing well, find a new boss to come in; if the main business is not working, replace it with an asset from a "hot track" to put in. Especially in the current context where shell resources are still tight, some investors are staring at the "shell" and regard it as gold.
But the truth is: today's shell is no longer the hot cake of yesterday. Since the full implementation of the registration system and the expansion of IPO channels, the valuation arbitrage space of backdoor listing has been continuously compressed, and the regulatory authorities have been keeping a closer eye on "quasi-backdoor" transactions than anyone else. If you accidentally step on the red line, not only will the restructuring fail, but you may also receive a "three-hit" of regulatory letters, inquiry letters, and even penalty letters.
In a recent project, Goheal assisted a GEM company with a market value of less than 2 billion to prudently evaluate the "injection of new energy assets" plan. At that time, the new energy asset seemed to be hot, but it was heavily indebted and the financial statements were watered down. Once it was pushed forward rashly, it was very likely to trigger the double minefield of "change of actual controller + change of main business" and be identified as "quasi-shell borrowing". We finally suggested that the client actively shrink and designed a "two-wheel drive" path: on the one hand, it promoted lightweight private placement, and on the other hand, it created an industrial chain acquisition that was highly synergistic with the existing main business, bypassing the regulatory red line while also avoiding the valuation minefield.
The conclusion is simple: today's capital market is not short of "shell changers", but what is lacking is the lasting power of real integration, real synergy, and real growth.
The second axe: Suspension of trading, is it a cover-up or "delaying time for space"?
If "shell change" is a self-help gesture, then "suspension of trading" is a time tactic. When a company faces major uncertainties, stock price fluctuations, and pending restructuring, "stopping it all" has become a common trick for many companies.
You may have also noticed that in the past two years, the regulatory attitude towards long-term suspension of "no substantial progress" is clear and firm: limited resumption of trading, no abuse, mandatory disclosure of progress... The purpose is very clear - don't regard suspension as a safe haven for "putting problems on hold".
However, in the calculations of some companies, suspension is still synonymous with operating space. For example, some companies suspended trading for restructuring after their stock prices were halved. During this period, they kept releasing rumors of "introducing strategic investors" and "business transformation", trying to raise expected valuations through "concepts + imagination". After resuming trading, they operated like a tiger, but the market voted with its feet - the limit was closed.
In Goheal's view, "suspension" has never been a "switch" for restructuring, but a "lubricant" for disclosure rhythm and market communication. We advocate the principle of "no suspension of trading but no suspension of communication": through phased information disclosure and gradual promotion of plan review, even if the stock price fluctuates, it is better than a "one-size-fits-all" suspension. More importantly, this can send a signal: you are not avoiding problems, but solving them.
We once assisted a Shanghai Stock Exchange main board company in designing a "quasi-synchronous disclosure path". Even during the overseas asset restructuring, it still maintained weekly media roadshows and monthly business briefings. As a result, the capital market is more willing to "wait for the flowers to bloom".
The third axe: Tell new stories, don't take fantasy as a moat
Storytelling is a traditional skill of the capital market. But now, "stories" are becoming more and more voluminous and more and more floating.
From "AI face-changing" to "metaverse takeoff", from "photovoltaic + energy storage" to "low-altitude economy", as long as you can get the heat, you can draw a PPT. Many listed companies do not look at the true quality of assets in mergers and acquisitions, but only look at "whether the keywords are trendy enough". As a result, what they bought back was not a gold mine, but a bubble.
Goheal once intervened in a typical case: a listed company focusing on traditional machinery manufacturing planned to enter the field of "industrial robots" through mergers and acquisitions. It sounds collaborative and imaginative, but after in-depth due diligence, we found that the core team of the other party had a turnover rate of more than 60% within the year, the ownership of key patents was unclear, and the core equipment was out of production for a long time-the so-called "new story" is actually an old joke that has been told a long time ago.
Therefore, we believe that customers should "pull back from the brink" and turn to look for automation equipment companies with real orders and technical accumulation. Even if the valuation is a little expensive, the "content must be real". The final acquisition was not only completed neatly, but also achieved a closed loop of "telling stories → making stories → changing stories" through the equity incentive design of the technical team.
In the final analysis, there is nothing wrong with telling new stories, but the mistake is to take fantasy as cash flow and concepts as barriers. The capital market is no longer the era of "investing money after hearing a joke". Your "story" must be down-to-earth, implementable, and monetizable to impress investors.
From shell replacement to suspension of trading, and then to storytelling, these three axes are ostensibly the "toolbox" of capital operation, but if abused, they will become "self-harm knives". Goheal always emphasizes that capital operation is not a fig leaf to "cover up problems", but an amplifier to "solve problems".
Goheal Group
In today's market, investors are more professional than in the past, regulators are more sensitive than in the past, and the media are more direct than in the past. If you use "capital illusions" to prevaricate the market, the market will eventually return you the truth with "price crit".
Having written this, we would like to ask a question:
Is the latest M&A you have seen "value grafting" or "changing soup but not medicine"? Is it "turnaround layout" or "delaying tactics"?
In the listed company you are following, who is operating these three axes? And who is quietly bearing the backlash brought by it?
Welcome to share your views, cases and stories in the comment area.
Goheal is willing to work with you to see through the "capital illusion" and lay out a capital strategy that can truly cross the cycle.
[About Goheal] Goheal is a leading investment holding company focusing on global M&A holdings. It is deeply engaged in the three core business areas of listed company control acquisition, listed company M&A and restructuring, and listed company capital operation. With its deep professional strength and rich experience, it provides enterprises with full life cycle services from M&A to restructuring to capital operation, aiming to maximize corporate value and achieve long-term benefit growth.
