A debt initial public offering (IPO) provides a viable alternative to the challenging traditional equity IPO to gain access to public markets for growth capital. For the right company at the right time under the right circumstances, it might make sense.
FINRA, NYSE and NASDAQ issue alerts to their members on the recent trend of significant unusual price increases on the day of or shortly after the IPOs of small-cap issuers, most of which involve issuers with operations in China and other foreign countries, as part of so-called “ramp and dump” schemes, and place the obligation to battle the schemes on underwriters as “gatekeepers to the public markets.”
Investors need to understand the purposes for which an issuer’s net proceeds from a public offering are intended to be used. However, it appears lately that many issuers are routinely providing little specificity with regard to the allocation of their proposed net proceeds. Perhaps some issuers believe that the specific information required pursuant to Item 504 of Regulation S-K forces them to publicly reveal business plans that might put them at a competitive disadvantage. Even so, whether or not an issuer has a specific plan for its offering proceeds in place, there are many instances requiring special Use of Proceeds disclosure that an issuer may overlook.
On December 9, 2021, the SEC Office of the Advocate for Small Business Capital Formation released its 2021 annual report condensing a treasure trove of data related to exempt and registered offerings by small businesses for the period July 1, 2020 to June 30, 2021 and providing related policy recommendations to support such businesses.
Spencer Feldman's article first appeared in Law360 (April 9, 2021, subscription required)
Prof. McClane’s extensive 20-year study of IPOs finds that, although boilerplate - as a substitute for specific disclosure and costly information gathering - may be an efficient (and perhaps strategically vague) means by which to make disclosure, efficiency comes at a high price to IPO issuers due to information-related costs such as underpricing and securities litigation.
Letters to prospective investors like those included in the Lyft and Uber IPO prospectuses may be symbolic gestures by founders, chairpersons and CEOs to lead the selling effort, but nonetheless provide an insight into the unique mission, core beliefs and “karma” of today’s newest IPO companies, with the SEC closely monitoring the bounds of this informal disclosure.
At least half a dozen U.S. coal firms are preparing or exploring public offerings, according to The Wall Street Journal, kicking off the biggest wave of coal IPOs in two decades.
Despite rising stock prices in 2016, it was a down year for the number and dollar-volume of IPOs, and a decline in the number of U.S.-listed public companies. The Wall Street Journal is concerned about the causes and effects of the IPO slump.
Recent IPOs by Twilio and Line are leading a revival for the tech IPO market this year.
Mark Cuban is pushing companies to go public earlier during their hyper-growth phase to spur more active equity capital markets.
Over the past few months, we have been increasingly asked by our corporate clients with pending IPO registration statements and by publicly traded companies with short-term funding needs to advise them on the spectrum of alternative sources of financing due to the current substantial volatility in stock trading and the resulting virtual standstill in their ability to access active public capital markets.
This post discusses the SEC’s approval of two interim final rules mandated by the capital markets aspects of the Fixing America’s Surface Transportation Act, signed into law on December 4, 2015. These rules address the timing and cost challenges faced by smaller publicly traded companies and are designed to ease disclosure requirements in connection with IPOs of emerging growth companies and certain registration statements filed by smaller reporting companies.