How a Rise in Acquisition Synergy Changed Entrepreneurs’ Exit Strategies and the IPO Valuation Premium

By Onur Bayar, Thomas J. Chemmanur, Christos Mavrovitis (Mavis) and Evangelos Vagenas-Nanos June 22, 2023 by renholding

Since 2000, of the total number of private firms that have gained access to the equity markets for the first time, more have done so through acquisition by another firm (public or private) than through an initial public offering (IPO). …

Skadden Discusses De-SPACed Companies Seeking Chapter 11 Protection

By Shana A. Elberg and Christopher M. Dressel May 11, 2023 by renholding

The contraction of the market for special purpose acquisition companies (SPACs) and the recent challenges de-SPACed companies have encountered have attracted considerable press attention. The stocks of many de-SPACed businesses — companies formed by the merger of a SPAC with …

SEC Commissioner Speaks at Columbia’s Going Public in the 2020s Conference

By Mark T. Uyeda March 7, 2023 by renholding

Good morning and thank you, [Columbia Law School] Dean [Gillian] Lester, for the introduction. I am honored to speak to this distinguished group of academics, practitioners, and regulators at today’s “Going Public in the 2020s” conference. My remarks reflect solely

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The Great Startup Sellout and the Rise of Oligopoly

By Florian Ederer and Bruno Pellegrino February 24, 2023 by renholding

Startup acquisitions by incumbent firms have been on the rise for the last few years. These acquisitions often allow larger companies to acquire new technologies or talent, while startups gain access to resources and a wider customer base. One notable …

Olshan Discusses FINRA, Stock Exchange Crack Down on Small-Cap IPO “Ramp and Dump” Schemes

By Spencer G. Feldman November 29, 2022 by renholding

On November 17, 2022, the Financial Industry Regulatory Authority (“FINRA”) issued a special alert to FINRA members concerning the heightened threat of fraud in small capitalization initial public offerings (“IPOs”). At the same time, both the New York Stock Exchange …

All Stick and No Carrot? Reforming Public Offerings

By Stephen J. Choi and Adam C. Pritchard November 14, 2022 by renholding

The traditional IPO was once the dominant path to raising capital for a growing company, but challengers, most notably SPACs and direct listings, have emerged. In our essay, we argue that the regulation of public offerings should seek to facilitate …

How Common Are Negative First-Day IPO Returns?

By Jacqueline Rossovski, Brian M. Lucey and Pia Helbing August 9, 2022 by renholding

Investors generally expect companies to make a successful and profitable debut on the stock market with their initial public offering (IPO). However, some stock market launches fall short: The price of shares in Deliveroo’s $2.8 billion IPO in 2021, for …

Why Do Companies Going Public Choose Controversial Governance Structures, and Why Do Investors Let Them?

By Laura Field and Michelle Lowry June 21, 2022 by renholding

Over the past three decades, there has been increasing concern about how corporate governance structures such as classified boards and dual class stock entrench managers, reduce director effectiveness, and reduce firm value. Likely as a result, mature firms have increasingly …

Too Much Information? Increasing Firms’ Information Advantages in the IPO Process

By Michele Dathan and Yan Xiong May 3, 2022 by renholding

Traditionally, high-growth private firms in the United States have used the public equity markets as their primary source of external financing to fund innovation and expansion. For this reason, well-functioning capital markets have been instrumental to the U.S. economy, supporting …

SEC Commissioner Speaks on IPOs and the Rise of SPACs

By Caroline A. Crenshaw April 29, 2022 by renholding

Thank you Hal [Scott] for that kind introduction and for inviting me to speak today. I am honored to precede such an esteemed panel of practitioners and academics. As always, I must give my standard disclaimer that my remarks are

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How Disclosure and Information Intermediaries Strengthen the Credibility of Initial Coin Offerings

By Thomas Bourveau, Atif Ellahie, Emmanuel T. De George and Daniele Macciocchi April 27, 2022 by renholding

The crypto-tokens market has recently emerged as an alternative source of financing for entrepreneurial ventures, with approximately $27 billion raised globally through March 2022.[1] These ventures issue blockchain-based digital “crypto-tokens” to raise external capital through an initial coin offering …

The Breakdown of the Public–Private Divide in Securities Law

By George S. Georgiev February 14, 2022 by renholding

Securities law in the United States has traditionally been designed around a set of lines – the “public–private divide” – which separate public companies, public capital, and public markets from private companies, private capital, and private markets. Until the early …

Fintech SPACs Have Been Swimming Naked – and the Tide Is Going Out

By Todd H. Baker January 27, 2022 by renholding

Acorns Grow Inc., the financial technology and investing startup, said last week that it was abandoning its $2.2 billion merger with SPAC Pioneer Merger Corp., putting itself on the hook for a $17.5 million termination fee. Coming almost eight months …

How Does Better Access to Public Firm Disclosures Affect IPO Firm Financing?

By Shawn Shi January 7, 2022 by renholding

Financial markets affect the economy in a fundamental way by facilitating the creation of capital. The market for initial public offerings (IPO) – also known as the “primary market” – is especially important because it allows fast-growing and innovative companies …

The SPACtacular Rise of the Special Purpose Acquisition Company: A Retail Investor’s Worst Nightmare

By Bobby V. Reddy December 13, 2021 by renholding

The special purpose acquisition company, or SPAC, is a company with no commercial or operating history that has listed on a stock exchange with the sole objective of raising financing to identify and acquire another company. SPACs developed after the …

Does Sustainable Investing Matter to the Market?

By Claire Economidou, Dimitrios Gounopoulos, Dimitris Konstantios and Emmanuel D. Tsiritakis December 7, 2021 by renholding

The value of an investment is no longer just about financial returns. A growing number of investors and other corporate stakeholders are calling for their money to go toward stocks or funds that are both profitable over the long term …

Ninth Circuit Gives Plaintiffs Some “Slack” on Tracing Shares

By John Livingstone, Anat Alon-Beck and Robert Rapp November 30, 2021 by renholding

On September 20, 2021, the Ninth Circuit took aim at a foundational requirement in securities litigation that has long bedeviled plaintiff’s attorneys. In a 2-1 decision in Pirani v. Slack Technologies, the court imposed a strict liability standard under …

SPACs: The Roles of Reputation and Disclosure When Information Is Limited

By Andrea Pawliczek, A. Nicole Skinner and Sarah Zechman October 25, 2021 by renholding

Special purposes acquisition corporations (also known as SPACs or blank check companies) have received a lot of attention recently – and for good reason. SPACs accounted for more than half of U.S. IPOs in 2020, raising over $70 billion in …

Comparing Angels and Venture Capitalists as Investors in Entrepreneurial Firms

By Thomas J. Chemmanur, Harshit Rajaiya and Jiajie Xu October 22, 2021 by renholding

Angel investors (angels) and venture capital (VC) investors are both important sources of financing for entrepreneurial firms, but some critics, particularly VCs, often believe that angels are less able than VCs to perform due-diligence. However, an alternative view holds that …

Unicorniphobia

By Alexander I. Platt September 20, 2021 by renholding

Once upon a time, a successful startup that reached a certain maturity would “go public” – selling securities to ordinary investors, perhaps listing on a national stock exchange, and taking on the privileges and obligations of a public company under …

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