I know pretty well how a M&A works in wallstreet. A pay $X for B, then B will rise to 97% of $X. If A pays in stocks, A's price will most likely drop a little. Here is my situation, I know a tiny company looking for a buyer, and I have a friend working for another company which is trying to buy the tiny company. Both CEOs from two companies already met, and they are only talking about details. My friend told me that, the tiny company's price will go up by at least 200% in 1 year, because they will do a reverse merger to take the bad assets in the tiny company then insert the good assets. I don't understand the logic of a reverse merger will boost the stock price. So my questions are 1 what is the success rate of a reverse merger when both CEOs already talk in private. 2 how much % will a reverse merger boost the stock price? Please don't worry about SEC on inside trading, this takes place in a country SEC does not control.