The Jumpstart Our Business Startups (JOBS) act was passed earlier this year, with the intent of making it easier for "emerging growth companies" to raise money in an initial public offering and through private placements. The peHUB article "The Unexpected Outcomes of the JOBS Act" provides some insight as to the unexpected consequences of the Act. The article identifies the following:
Link to the article: http://www.pehub.com/161586/the-unexpected-outcomes-of-the-jobs-act/
- Special purpose acquisition vehicles are taking advantage of the confidential S-1 filing provisions of the Act. The Act was meant to help emerging growth companies, not SPAVs.
- Registration statements will add risk factors to address the reduced financial disclosures required by the Act. Basically, reduced disclosure means greater risk that some investors may not find the stock an attractive investment.
- The "testing the waters" provision of the Act, which allows companies to talk to investors prior to publicly filing an IPO registration statement, has mixed results so far.
Link to the article: http://www.pehub.com/161586/the-unexpected-outcomes-of-the-jobs-act/
