decline in ipos

[zdreg]

http://www.nytimes.com/2010/11/18/b...=me&adxnnlx=1290139243-zZ6pTVKpmIvf+8rggn9+4w


The annual rate of I.P.O.’s peaked in 1996, when around 756 American-based companies went public, according to Dealogic. That figure fell to a low of 36 during the financial crisis in 2008. It picked up to about 50 in 2009 and, so far this year, it is running at about 100, excluding G.M.

Several companies are set to go public Thursday, in the shadow of G.M, including Anacor Pharmaceuticals and the broker-dealer company LPL Investment Holdings.

But while I.P.O.’s have come out of their deep freeze, they are still running below the level required to hold constant the number of public companies. And that, analysts say, has unsettling implications for American job growth.

“I would worry about the number of start-ups declining as they are the engines of the future,” said Eric Olsen, a senior partner the Boston Consulting Group in Chicago. “Smaller companies tend to drive innovation more than big companies. I worry about the lack of new companies.”

Granted, many businesses are thriving privately, away from public exchanges. They are financed by private equity or bank lending.

 

[nazzdack]

Quote from zdreg:
----Anacor Pharmaceuticals and the broker-dealer company LPL Investment Holdings.
----Smaller companies tend to drive innovation more than big companies. I worry about the lack of new companies.

1) 2-0-0. :eek:
2) Medical and financial IPO's are "bad" because they tend to be parasitic, not productive, on society.

 

[RewriteQuran]

I think we should look into IPOs in China & India

 

[nutmeg]

Not a mention on the impact of SOX on IPO's.

I thought IPO's moved to London, many cos thought of going private (if feasible).

The Fed's write a rule, f things up, and wonder where the business went.

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The Chilling Effect of SARBANES-OXLEY: Myth or Reality?

By Lynn Stephens and Robert G. Schwartz



JUNE 2006 - When Congress passed the Sarbanes-Oxley Act of 2002 (SOX) in response to Enron and other corporate misdeeds, apparently little thought was given to its impact on start-ups and early-stage companies and their initial public offerings (IPO). From 2000 to 2003, particularly in the technology sector, IPOs were on the decline due to the global recession. While technology company IPOs began to increase again in 2004, going public has now become a more challenging way for entrepreneurs to raise capital. The complex recordkeeping required for compliance with SOX may be responsible for the decline in IPOs. The act appears to have also served to increase the number of mergers, joint ventures, and acquisitions. A survey of 108 entrepreneurial technology firms, conducted by the authors, addresses the impact of SOX on their future development.

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As a consequence, there have been reports of companies that have delisted their securities or have elected to delay or cancel their IPOs. Of the 115 public company respondents to Foley & Lardner’s 2004 survey, 21% indicated that they were considering going private, 6% indicated they were considering selling the company, and 7% indicated they were considering merging with another company as a result of SOX requirements.





http://www.nysscpa.org/cpajournal/2006/606/infocus/p14.htm