Trying to coax IPOs
Stanching the decline in public stock offerings and making it more attractive for companies to go public is high on the Securities and Exchange Commission’s agenda under its new chairman.
The decline in IPOs in recent years, especially for smaller companies, has sparked consternation in Wall Street circles and among some Republican lawmakers. They say burdensome regulations on public companies are largely to blame.
More companies are turning to the private markets to raise capital or opting to stay private.
That means fewer opportunities for ordinary Americans to share in the economy’s growth, SEC chief Jay Clayton (shown) said recently. He said the SEC is looking at ways to make it more enticing for companies to tap the public markets, while still maintaining investor protections.
Clayton, a Wall Street lawyer named by President Donald Trump to head the market watchdog agency, has worked on numerous deals taking companies public.
The SEC warns the public that IPOs can be risky and speculative, and it’s important to read an offering’s prospectus in deciding whether to invest.