While the recent billion dollar initial public offerings (“IPOs”) of Alibaba and Citizens Financial Group have grabbed headlines, a “boomlet” of smaller offerings has occurred. Writing for Forbes, Jackie Kelly contends that the Jumpstart Our Business Startups (“JOBS”) Act’s provisions for emerging growth companies (“EGCs”) account for this phenomena.
Kevin LaCroix of the D&O Diary confirms that view. In a September blog post, LaCroix cites the statistics and notes the industries where EGC IPOs seem most popular: biotech and pharmaceuticals. But LaCroix cautions that a “JOBS Act effect” may be occurring with some questioning whether the JOBS Act’s exemptions are really worthwhile.
Three business school professors, Susan Chaplinsky, Kathleen Weiss Hanley, and S. Katie Moon, studied the costs associated with using the JOBS Act in “The JOBS Act and the Costs of Going Public.” Summarized in the CLS Blue Sky Blog, the paper weighs the direct costs of a JOBS Act IPO against the risks of underpricing and the lack transparency. View the summary here.
Accounting professors Mary Barth, Wayne Landsman, and Daniel Taylor published “The JOBS Act and Information Uncertainty in IPO Firms.” The Harvard Law School Forum on Corporate Governance and Financial Regulation published the abstract from their paper which considers whether the JOBs Act’s EGC provisions are generating information uncertainty for IPOs.