How high can a reverse merger stock go?

[qll]

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.

 

[brokerboy]

Nobody can give you that answer but a reverse merger is when a good private company is bought with stock of bad public company. The good private company gets a lot of shares for controlling interest and skips around the listing system. If you’re not wealthy it might not be worth the risk. If you have money to waste then do it small.