Selling Chickens Before They’re Hatched

Selling something you don’t have can be a risky business strategy, as stock speculator Daniel Drew once noted:

He who sells what isn’t his’n
Must buy it back, or go to prison.

But selling off a piece of a company you haven’t yet bought is getting to be a more popular way of getting funding for takeovers. A firm contract in hand to sell part of the assets may in fact be crucial to making the deal work, as lawyers Aaron Kenavan and Weyinmi Popo of Sydney’s Freehills note in Selling Before You Buy in Public Market Deals.

[Frank Snyder]