This morning’s first panel features Robert Bartlett, Reza Dibadj, and Martin Zwilling, discussing the JOBS Act’s Title I provisions for initial public offerings.
The panelists were asked to discuss the problems with IPOs antecedent to the passage of the JOBS Act and the problems that the Act set out to solve.
Reza Dibadj provided statistical evidence to support the fact that IPOs have significantly declined in the 2000’s. There was a significant fear on the part of policy makers that IPOs were declining or going overseas costing jobs here. But what wasn’t clear was the causation of the IPO decline. Statistics do not confidently show the cause of the demise of the IPO market and whether entrepreneurs are just preferring mergers and acquisitions instead.
Martin Zwilling pointed out that the start-up companies he works with aren’t really interested in choosing the IPO route. They choose to remain private because they prefer the freedom of self ownership and not being beholden to investors and the public. Mark Zuckerberg may be regretting his decision to go public for this very reason. So start-up entrepreneurs only choose to commence an IPO when they are ready to get out of their company- but even then they often opt for a merger instead.
Robert Bartlett emphasized that this Act was passed because it was pitched as a bill to create jobs. The IPO decline had already begun before the passage of Sarbanes-Oxley so it is not clear whether those regulations are restricting the IPO market. Whether or not this law actually improves the IPO process and increases its use is unclear because myriad issues are contributing to the decline in IPO applications.
Stay with The Network for further updates from the Berkeley Business Law Journal JOBS Act Symposium.