Bankers expect uptick in IPOs as a result of legislation
A survey of U.S. investment bankers finds the majority expect more initial public offerings to come to market as a result of the new federal JOBS Act, which relaxed regulations for companies that go public and have revenue of less than $1 billion. But the same 55 percent majority also is concerned the act's relaxed regulations could lead to more ethical lapses and litigation.
John Tucci is a partner in the Woodbridge office of the accounting and consulting firm BDO USA, which conducted the survey of 100 investment bankers in June.
Tucci predicted the JOBS Act — short for Jumpstart Our Business Startups — will be very important for New Jersey, "which is a hotbed of startup companies in pharma and biotech." Before the JOBS Act, going public was a long-term plan, "but with the relaxed regulations, something that was thought of as being five years out could be something that can be done in one or two years."
According to the BDO survey, investment bankers are divided on how the act's relaxed disclosure requirements will impact IPO pricing, and whether a provision allowing confidential filings with the Securities & Exchange Commission will increase the number of IPOs.