July 16, 2013

JOBS Act: A Bust?

This Cooley news brief from Cydney Posner probably doesn’t tell many in our community anything that wasn’t predictable:

In this article from the Wall Street Journal, Bankers: The JOBS Act Isn’t Doing its Job, the author contends that if “you ask investment bankers, most of them will say the JOBS Act has fallen flat.” According to the article, “only 14% of bankers polled said they felt the JOBS Act was boosting the number of initial public offerings, according to a survey of 101 capital markets executives at large investment banks released by BDO USA LLP this week. That’s half the level who said the law was having a positive impact last winter, and down sharply from 55% who said so last year, according to BDO. The SEC is set to vote on some aspects of the JOBS Act on Wednesday morning, including proposed rules to eliminate the prohibition on general solicitation.”

Even though many of the rules implementing the JOBS Act remain to be adopted, “more than two-thirds of the bankers polled predicted the law will never achieve its goals of increasing the number of companies that go public. ‘There has clearly not been double or triple the amount of IPOs,'” according to the Director of SEC Services for BDO.

However, the new confidential filing process has been widely adopted, with estimates of 150 companies that have filed confidentially under the rule. “Nevertheless, bankers have complained the confidentiality granted by the JOBS Act has obscured the pipeline, making it more difficult to pinpoint windows in the market.” Some companies are also taking advantage of the ability to file just two years of audited financials rather than three. The article reports that this aspect of the rules has been helpful primarily to companies that changed auditors or did an acquisition and may not have three years of audited financials readily available.

The article reports that there were “95 IPOs in the first half of the year, up from 74 in the first half of last year. Excluding Facebook ‘s large $16 billion IPO last year, IPO proceeds from the first half of the year are up 66% from 2012, according to BDO, but most bankers attributed the increase to an increase in deals by private equity firms.”

Reg D: SEC Posts Adopting & Proposing Releases (Plus An Updated Study)

The SEC has posted its two adopting releases – elimination of general solicitation ban and Reg D disqualifications – as well as its new proposing release. The adopting release cites an updated study entitled “Capital Raising in the U.S.: An Analysis of Unregistered Offerings Using the Regulation D Exemption, 2009-2012” that updates RiskFin’s 2012 study on exempt offerings. And here are the memos we have posted in our “Regulation D” Practice Area

Tune in to our upcoming webcast – “Reg D Offerings: What Is Happening Now” – that will provide a variety of perspectives on how to implement the new rules…

Transcript: “A Proxy Season Post-Mortem: Lessons Learned”

We have posted the transcript for our recent webcast: “A Proxy Season Post-Mortem: Lessons Learned.”

– Broc Romanek