Global Themes

On Globalization & Venture Capital

NASDAQ, AIM and IPO..

Some interesting statistics from the Mid-Year IPO Update   (June ’06) from America’s Growth Capital

  • In the first half (upto May) of 2006, there were 130 IPOs on AIM vs. 48 for the NASDAQ..”
  • Against an average of 157 Technology IPOs in the US between ’91 and 2000, the average since 2001 has been 31.
  • Between 2001 and 2006 (annualized), average number of IPOs on AIM has been 177, NASDAQ average has been 93.
  • US AIM IPOs (Tech and non-Tech) will this year likely exceed 10% of all IPOs on AIM.

Reasons?

Not least reglatory and compliance issues.

The report lists these amongst others:
“(i) the substantial costs related to public company compliance requirements, particularly SOX..(vi) the increased exposure to litigation faced by public companies, and (vii) increasingly higher hurdles from Big 4 auditors.” 
 
Further on, it adds:
 

“SOX has effectively killed the classic U.S. technology IPO.  Without a viable U.S. IPO market, our emerging growth technology companies are severely disadvantaged particularly against the growing competition from India and China. BOLD  Ironically, the best way to access early stage public U.S. equity investors today is via AIM.  In what is a recent phenomenon, larger U.S. private companies are now even considering listing on AIM’s parent, the London Stock Exchange, a further indication of the extent to which U.S. companies are looking abroad. “

 

Which raises two questions:

  1. How much is SOX hurting US entrepreneurship…and venture investments looking for public market exits?
  2. Has SOX (unwittingly) become a trigger for “Gloablization”?

August 10th, 2006 Posted by | Globalization | no comments

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