In the classic definition, a shell company (Börsenmantel) refers to a company that is already traded on the stock exchange but no longer pursues any operational business. The valuable asset is the stock market listing, which can be used by other companies to go public quickly. The term "shell company" can be seen as a collective term, while other concepts such as SPAC, Reverse IPO, Reverse Merger, Reverse Takeover, and Cold IPO can be understood as execution-oriented forms of a shell company.
SPACs are a specific form of a shell company that became predominantly popular in the USA. SPACs are founded as empty shells with the goal of raising investor capital to find companies within a set timeframe (usually two years) that could be lucrative for the SPAC or its initiators/investors as a result of a merger or acquisition. Unlike the classic shell company, the SPAC, filled with investor capital, searches for a suitable operationally active company as an acquisition target itself, whereas the classic shell company is used by companies striving to go public.
The distinction between the three terms Reverse IPO, Reverse Merger, and Reverse Takeover is marginal and occurs based on the way the reverse acquisition is executed or what goal it pursues. The terms originate from the field of M&A transactions (Mergers & Acquisitions). In contrast to ordinary acquisitions and mergers, where a larger company absorbs a smaller one, the word "reverse" describes a backward approach where a lower-valued company usually takes over a higher-valued company through the issuance of new shares.
If the larger company is merged into the smaller company after the acquisition, this is understood as a Reverse Merger. If the larger company remains as a subsidiary after the acquisition, it is referred to as a Reverse Takeover. A Reverse IPO occurs when a Reverse Merger or Reverse Takeover transaction implements an indirect public offering, meaning the goal of the acquisition was ultimately to obtain a stock market listing.
The term Cold IPO can in turn be seen as a collective term for the aforementioned M&A transactions, as a result of which indirect public offerings are carried out through the use of still-active companies.
In common usage, all the aforementioned terms sometimes mix due to their relatively small differentiations and are often used synonymously.
What the aforementioned transactions for a fast IPO have in common is that they offer companies striving to go public significant time and cost advantages. Further information on the possibilities of a fast IPO can be found at www.instant-ipo.de.