AX Trading announced the launch of "DirectAX," a unique offering that allows investment banks working on behalf of issuing companies and Private Equity/Venture Capital firms to leverage The AX auction to sell blocks of stock directly to leading institutional investors.
Using DirectAX, leading global investment banks and boutique investment banks are now able to securely and efficiently sell registered shares on behalf of their corporate, PE and VC clients directly to institutional investors via The AX auction. AX also intends to add the ability to conduct corporate buybacks via the AX auction as well.
This partnership with leading investment banks makes The AX Trading Network available to issuing companies that have an outstanding shelf offering and to private equity and venture capital firms that own registered, unrestricted shares of public companies.
The AX auction process helps ensure that the selling sponsor receives the best price for their shares and presents a level playing field for all institutional clients who purchase shares in the auction.
"The AX Trading Network is all about connecting equity market participants in a secure environment," said AX Trading CEO Kevin Callahan. "DirectAX extends our network to the corporate community, allowing companies to efficiently raise capital from leading institutional investors and allowing PE/VC firms to monetize their public holdings."
Merriman Capital, Inc., a wholly owned subsidiary of Merriman Holdings, Inc. (OTCQX: MERR), a San Francisco-based, boutique investment bank and brokerage firm has partnered with The AX to take DirectAX to its clients. Over the last ten years, Merriman has closed over $9 billion in financing transactions for small and micro cap companies.
"In today's increasingly complex and illiquid marketplace, companies and sponsors are looking for simple solutions that allow them to efficiently raise capital for their firms or their limited partners," said Jon Merriman, CEO of Merriman Capital. "We look forward to leveraging this new liquidity solution for our clients."
Under the DirectAX approach, the selling shareholder can sell shares directly to institutional buyers via an investment banking sponsor. The AX auction process fosters competition among buyers and could help the issuing company or PE/VC firm to receive the best price for their shares.
Also, via the DirectAX approach, the selling shareholder can play a proactive role in working with their investment bank to determine the institutional investors that are invited to participate in The AX auction, ensuring that its shares end up in the hands of selected, long-term investors.
Under the DirectAX approach, shares are sold directly to institutional investors via a block trade. The selling entity can set the minimum size of the block trade and also the lowest possible price they would accept for their sale. By transferring shares directly from the selling entity to long-term holders, the DirectAX approach can help lead to lower market impact and improved execution for corporate clients.