I don't think there is any secret as to why companies stay private, and again, it has nothing to do with Dodd Frank or Sarbanes Oxley.
this is one of my pet peeves. Someone long ago said Sarbanes Oxley would kill IPO's and it has forever been regurgitated even thought there is plenty of evidence to put that theory to rest.
> The study also looked into the old argument that "regulatory and legal changes in the early 2000s, including Regulation Fair Disclosure ('Reg FD') and the Sarbanes-Oxley Act ('SOX'), made it more expensive" to list. These played little or no role because the decrease in new listings was "well on its way before these changes took place." At worst, the regulatory burden accounts for only a small portion of the decline.
When you are private investors can only either love you, and invest, or pass on you.
When you're public people can bet either for or against you, which means you get a very real and not usually merciful view of what exactly you are worth due to the shorts and longs having to come together to agree on what your company is worth.
It seems like a tough sell to say that increased transaction costs categorically don't affect the frequency of IPOs. In 1986, Adobe raised $6M at their IPO. Whatever other factors have contributed to a decline in IPOs, it's hard to deny that Adobe-sized offerings don't really happen anymore.
This felt like a pretty weak argument. Oversight will help you? Okay, then, we'll just do as the quoted examples of Slack and AirBnB, and regularly perform rigorous 3rd-party audits.
It also seriously discounted how destructive the focus on short-term gains can be for a firm, without ever fully addressing that influence from the market.
this is one of my pet peeves. Someone long ago said Sarbanes Oxley would kill IPO's and it has forever been regurgitated even thought there is plenty of evidence to put that theory to rest.
https://www.bloomberg.com/view/articles/2015-06-24/where-hav...
> The study also looked into the old argument that "regulatory and legal changes in the early 2000s, including Regulation Fair Disclosure ('Reg FD') and the Sarbanes-Oxley Act ('SOX'), made it more expensive" to list. These played little or no role because the decrease in new listings was "well on its way before these changes took place." At worst, the regulatory burden accounts for only a small portion of the decline.
When you are private investors can only either love you, and invest, or pass on you.
When you're public people can bet either for or against you, which means you get a very real and not usually merciful view of what exactly you are worth due to the shorts and longs having to come together to agree on what your company is worth.