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
Category Archives: IPO
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