Small Businesses Remain Wary of IPOs
By ANGUS LOTEN
As lawmakers press regulators to revamp the rules for initial public offerings, a new study shows few small firms are interested in going public.
In the wake of Facebook’s rocky IPO in May, Rep. Darrell Issa (R., Calif.), in a letter Wednesday to Securities and Exchange Commission Chairman Mary Schapiro, urged the agency to overhaul regulations governing pricing and disclosure in public offerings, among other measures.
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Sen. Jack Reed (D., R.I.), chairman of the subcommittee of the Senate Banking Committee, told the Wall Street Journal Wednesday that reforms were necessary to boost investor confidence.
Since its stock market debut, Facebook’s market value has fallen below $90 billion, from $104 billion. The sharp decline has “taught us that, at a minimum, the IPO process suffers substantial flaws,” Rep. Issa said in the letter.
Over the past decade, U.S. IPOs have dropped to an average of 130 a year, from more than 500 during the 1990s, according to the Dealogic.
To boost those numbers, the Jumpstart Our Business Startups Act, or
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