Chicago, IL – According to a new study by BDO USA, LLP, one of the nation's leading accounting and consulting organizations, less than one-third (29%) of capital markets executives at leading investment banks believe the JOBS Act has been effective in increasing the number of IPOs on U.S. exchanges. This is a considerable drop since last summer when a majority (55%) of I-bankers believed the JOBS Act would be successful in increasing the number of businesses going public. Today, forty-two percent of the bankers see no evidence that the new law is positively impacting IPOs, while more than a quarter (28%) believe that it is too early to evaluate the law's impact.
"The survey clearly shows that the investment banking community is less enthusiastic about the JOBS Act than it was immediately following the law's enactment," said Wendy Hambleton, a Partner in the Capital Markets Practice of BDO USA. "In addition to the lack of a positive impact on IPO numbers, the bankers indicate that the new law's confidential filing provision has made it more difficult for them to advise clients."
According to the SEC, in 2012, more than 100 companies utilized the JOBS Act's confidential filing process to "test the waters" for a possible IPO. More than three-quarters (80%) of I-bankers indicate that this lack of transparency has had a negative impact on their ability to advise clients on their offerings due to a lack of information on potential competitors for investment dollars. Although only 9 percent of the bankers describe this difficulty as "substantial."
Moreover, investor groups are also giving the confidential filing process mixed reviews. Almost half (48%) of capital markets executives report that investor groups are reluctant to meet with emerging businesses that are confidentially testing the waters for an IPO under the JOBS Act, as they prefer to wait until the company has made a public commitment to the offering.
These findings are from The 2013 BDO IPO Outlook, a national survey conducted by Market Measurement, Inc. on behalf of BDO USA. Executive interviewers spoke directly to capital markets executives, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation's leading investment banks. The survey was conducted in December of 2012.
BDO USA is a valued business advisor to businesses making a public securities offering. The firm works with a wide variety of clients, ranging from multinational Fortune 500 corporations to more entrepreneurial businesses, on a myriad of accounting, tax and other financial issues.
About BDO USA
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 45 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,204 offices in 138 countries.
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