A gypsy swap is a process companies may use to raise capital by convincing existing shareholders to swap their common shares of stock for restricted shares of stock, the business may then sell the recaptured common shares to new investors, therefor increasing available capital. .
Most sophisticated inventors considered gypsy swaps as a last-ditch effort used to avoid cash constraints or bank covenants, and one of many "creative" capital raising endeavors that may signal issues that should be investigated further.
