At the SEC’s meeting of the Advisory Committee on Small and Emerging Companies (ACSEC), a presentation was delivered on the slowdown in US IPOs and what could possibly be done to increase the moribund IPO market.
In the past ten years, the number of public companies has declined by almost 50%. In brief, the primary cause has been the heightened cost associated with the onerous regulatory environment. This has pushed companies to seek private capital, and there is plenty of it between family offices and other institutions. These firms typically do not want an IPO but seek a clean sale as the best exit opportunity.
J. Bradford Eichler, Executive Vice President and Head of Investment Banking of Stephens, labeled the JOBS Act as a “home run” but admitted much more needed to be done to improve the viability of a robust initial public offering market.
In brief, Eichler believes that additional efficiency and cost improvements are needed to increase US IPOs.
The presentation is embedded below.
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