Skadden Discusses Final SEC Rules on SPACs and De-SPACs

By Andrew J. Brady, Joshua Shainess, Michael K. Hoffman, C. Michael Chitwood and Gregg. A Noel February 16, 2024 by renholding

On January 24, 2024, the Securities and Exchange Commission (SEC) adopted final rules that impose significant additional procedural and disclosure requirements on initial public offerings (IPOs) by special purpose acquisition companies (SPACs) and in business combination transactions involving SPACs (de-SPACs). …

How Direct Listings Compare With Initial Public Offerings

By Anna Bergman Brown, Donal Byard and Jangwon Suh February 1, 2024 by renholding

Initial public offerings (IPOs) and direct listings (DLs) offer two different mechanisms for a firm to obtain a listing in the public capital markets. Historically, DLs have been rare in the U.S., but that has changed in recent years, starting …

SEC Chair Speaks on Final Rules for SPACs, Shell Companies, and Projections

By Gary Gensler January 25, 2024 by renholding

Today [January 24], the Commission is considering whether to adopt final rules that will strengthen protections for investors in special purpose acquisition companies (SPACs). I am pleased to support these final rules because they will better align the protections investors

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SEC Commissioner Dissents on Final SPAC Rules

By Mark T. Uyeda January 25, 2024 by renholding

Today [January 24], the Commission considers a lengthy adopting release of nearly 600 pages that extensively describes numerous disclosure, dissemination, forward looking statement, liability, and accounting provisions purportedly designed to advance investor protection and facilitate capital formation for special purpose …

Are Celebrity SPACs Advantageous or Just Gimmicky?

By Emre Kuvvet January 4, 2024 by renholding

Special Purpose Acquisition Companies (SPACs) have been around since the 1980s but surged in popularity as the preferred method for private companies to go public in recent years. Celebrity SPACs, those associated with individuals from various industries like show business, …

Dual-Class IPOs Offer Solution to Unicorn Governance Failure

By Ofer Eldar December 18, 2023 by renholding

Dual-class stock structures have proliferated in recent years. In 2017-2019, almost 30 percent of IPOs in the U.S. had a dual-class structure, and most of them were founder-controlled technology firms (Aggarwal, Eldar, Hochberg and Litov, 2020). Their increasing popularity has …

Globalization and the Decline of IPOs

By M. Vahid Irani, Gerard Pinto and Donghang Zhang November 2, 2023 by renholding

Initial public offerings (IPOs) play a vital role in facilitating capital formation and wealth distribution within an economy. The decline and low number of U.S. IPOs over the past 25 years have raised concerns among entrepreneurs, investors, and policymakers. The …

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 …

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