Regulation A issuers may be younger, smaller and less profitable than more established Form S-1 issuers, but they must still comply with numerous specific SEC regulations governing disclosures and procedural rules during ongoing public offerings. By enforcing Regulation A rule violations against ten microcap companies, the SEC has made clear that, despite any relaxation of restrictions on these offerings, well-established SEC rules apply to Regulation A offerings as much as they do to traditional registered offerings.
On May 16, 2023, the SEC announced settlements with ten ...
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.
Spencer Feldman's article first appeared in Law360 (April 9, 2021, subscription required)
There is a continuing debate about contributing factors to a declining IPO market with some pointing to the high level of IPO costs, particularly underwriting fees. Narrative disclosure of these costs may serve to make issuers more aware of those costs (as compared to those of alternative capital formation strategies) and may lead to calibrating those levels more closely in relation to the costs of taking a company public.
In an exceptionally thoughtful column using the recent Social Capital Hedosophia SPAC IPO as his test case, author James Mackintosh suggests it's time to fix IPOs with smarter lock-ups, an auction process variant for price setting and more say by issuers over who gets stock.
This post first appeared in Securities Regulation Daily, a Wolters Kluwer publication, on August 29, 2017.
Item 401 of Regulation S-K requires that companies disclose the business experience of its directors, officers, nominees and significant employees in order for investors and stockholders to evaluate the management of a public company
Spotify and similar subscription-driven publishers have unique business advantages that make a direct listing potentially as attractive as a traditional IPO – a large customer base of potential investors and knowledge of direct response digital marketing techniques.
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.