Chicago, IL – According to a new study by BDO USA, LLP, one of the nation’s leading accounting and consulting organizations, only 14 percent of capital markets executives at leading investment banks believe the JOBS Act is having a positive impact on increasing the number of IPOs on U.S. exchanges. A majority (58%) say it isn’t positively impacting IPOs, while just over one-quarter (28%) believe it is still too early to evaluate the impact. Of those who don’t believe it has had a positive impact or have yet to decide, more than two-thirds (68%) predict the law will never achieve its desired goal of increasing the number of businesses going public.
These latest findings represent a precipitous drop in the JOBS Act’s perceived effectiveness from a year ago when a majority (55%) of I-bankers believed the JOBS Act would have a positive impact on U.S. IPO activity. Yet, by last winter, less than one-third (29%) of the capital markets community believed the new law had been effective in increasing the number of IPOs on U.S. exchanges and now that percentage has dropped even further.
Despite the overall negative review of the JOBS Act, a majority (56%) of the bankers indicate the law’s confidential filing provision has been a positive for businesses seeking to evaluate a possible offering.
“When it comes to the JOBS Act, first impressions were certainly deceiving for the capital markets community. When the new law was introduced last year, bankers viewed it as an engine for more IPOs from emerging businesses, but in practice the law has fallen far short of those lofty expectations,” said Wendy Hambleton, Partner in the Capital Markets Practice at BDO USA. “Despite its continuing fall in popularity, it still may be too early to cast a final verdict on the JOBS Act. According to reports, approximately 200 businesses have taken advantage of the law’s confidential filing provision. If a strong majority of these confidential filers actually follow through with an offering, the perception of the JOBS Act among I-bankers could again change drastically.”
These are just a few of the findings of The 2013 BDO IPO Halftime Report survey which examines the opinions of 101 capital markets executives at leading investment banks regarding the market for initial public offerings in the United States during the second half of the year. The survey was conducted in June of 2013.
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