In apparent recognition of the popularity of “testing the waters” by Emerging Growth Companies (EGCs) before proceeding with an IPO, the Securities and Exchange Commission recently voted to propose an expansion of this accommodation to all companies. Currently, EGCs and any person authorized to act on behalf of an EGC may engage in oral or written communications with potential investors that are qualified institutional buyers or institutional accredited investors to determine whether these investors might have an interest in a contemplated securities offering without violating the SEC’s prohibition on gun-jumping.… More
Category Archives: IPO
The SEC’s Division of Corporation Finance has posted helpful FAQs about the impact of the government shutdown on registration statements for public offerings. During the shutdown, the SEC will not declare registration statements effective, but companies still have several options that may enable them to pursue their offerings.
Well-known seasoned issuers can continue to file automatically effective registration statements, and companies with already effective shelf registration statements should be able to complete a takedown unless the terms of the offering would require the issuer to file a post-effective amendment.… More
Spotify made a big splash with its novel approach to “going public.” Rather than following the tried-and-true path of an initial public offering – where the issuer sells stock to the public through underwriters – Spotify pursued a “direct listing.” But did it really do anything different?
While it is true that Spotify did not directly sell any stock to the public, it did file a traditional form of registration statement,… More
In a series of recent public statements (most recently in February 2018), the SEC has encouraged companies to pursue relief under Rule 3-13 of Regulation S-X—the regulation that specifies the form and content of financial statements required by public companies. Pursuant to Rule 3-13, the SEC Staff may permit the omission of financial statements that are otherwise required under Reg S-X or the substitution of such required financial statements with other statements of comparable character.… More
We are hosting a session at NewCo Boston entitled “Planning for Exit. Top 5 Pitfalls.” It’s never too soon to plan for your company’s exit. Whether by IPO, sale or otherwise, you need to make sure you are ready when opportunity knocks.
Our discussion will guide you through the stages of exit and help your company avoid the most common mistakes. Preparing now makes for a smooth exit later!… More
On September 26, 2017, proxy advisory firm Institutional Shareholder Services (ISS) released the results of its annual Governance Principles Survey, which showed that 43% of surveyed investors consider multi-class capital structures with unequal voting rights inappropriate for a public company under all circumstances. An equal percentage felt such structures may be appropriate in the presence of protections for low-vote shareholders. Only 5% supported this structure without limitations. … More
The New York Stock Exchange recently re-filed a proposal to permit direct listings, where private companies list a class of shares without an IPO or other registered offering. The rule change was likely prompted by apparent market interest in such a path to “going public” coupled with the NYSE’s belief that its rival, The Nasdaq Stock Market, already permits direct listings.
If approved by the SEC,… More
Effective today, July 10, 2017, the SEC’s Division of Corporate Finance will accept draft registration statements for review on a confidential basis from an expanded group of issuers. The confidential submission process, which was formerly limited to IPOs by emerging group companies, or EGCs, is now available to most issuers and also in conjunction with follow‑on offerings in the first year after the IPO or an initial listing on a stock exchange.… More
Investor advocates are turning the spotlight on the corporate governance practices of newly public companies that they regard as hostile to shareholder interests. In connection with their IPOs, most companies adopt customary defensive measures to protect themselves from activist investors, who might otherwise take advantage of their typically smaller market capitalizations to try to seize control of the company. These measures often include a classified board of directors, whose terms are staggered over three years. … More