In this episode, Matt Kelly and I take a continued deep dive the underlying assumptions around the reasons for lack of IPOs by small and mid-cap sized firms. We focus on a speech by SEC Commissioner Robert Jackson recently gave exploring possible reasons why middle market companies aren’t going public. It turns out that the numbers showed that the costs for going public, roughly 7% of the total return has remained constant since the early 90s.
While the Administration has consistently talked about the costs of going public driven by the administrative cost required under Sarbanes-Oxley and Dodd-Frank, it turns out that is only part of the equation. The other part is investment bankers whose fees have not dropped or even become more efficient in nearly 25 years. We explore the implications from this finding, what it may mean for the SEC’s attempts to bring more small and mid-cap companies into the public market and compliance going forward.
For more see Matt Kelly’s piece More on Declining IPO Trends
It turns out there are more reasons companies do not go public, other than SOX and Dodd-Frank compliance.Click to tweet