Posted on 22 Jan 2013 by Neilson
Less than one-third of investment bankers think new initial-public-offering rules put in place last year are leading more companies to go public, according to a survey released Tuesday.
The pool of 100 capital-markets executives were asked for their thoughts on the impact of the Jumpstart Our Business Startups Act for a survey conducted by BDO USA LLP, an accounting-and-consulting firm.
The percentage of respondents who think the JOBS Act is boosting the number of IPOs—29%—was significantly smaller than in a similar June survey. That report showed 55% of respondents thought the act would be successful in adding to the IPO tally. In the recent survey, 42% of bankers said they see no evidence the new law is lifting the IPO count.
The JOBS Act, enacted in April, eased accounting and disclosure requirements on smaller companies to help them go public. Proponents said allowing companies easier access to capital markers would spur their growth and create jobs.
"Everything was very new" when BDO conducted its June survey, said Wendy Hambleton, a partner in BDO's Capital Markets Practice. "There was more optimism. It had just been signed, and there hadn't been any impact yet."
The latest survey was conducted in December.
By the end of the year, bankers had a better sense of the degree to which deal flow had been accelerated by the new rules, she said, and a clearer picture of whether the bill was leading to more debuts.
"Probably what they were seeing is that the answer is no, to date," Ms. Hambleton said.
The bankers surveyed gave cool reviews to new rules that allow filings to remain confidential until later in the process, even as they market the deals, the survey showed. More than three-quarters, or 80%, of those surveyed said this lack of transparency was hurting their ability to advise clients.
Forty-eight percent of respondents said investors are reluctant to meet with emerging businesses that are confidentially "testing the waters." Instead, they prefer to wait until the company has made a public commitment to an offering, the survey showed.