Has Reg A+ Been A Success?
This week, David Feldman, a partner in the global law firm of Duane Morris LLP, shared a post titled “The Reg A+ Shakedown Cruise: Trick or Treat?”
In the post, Feldman discussed how with Reg A+ “There is quite a bit of both positive and challenging news as this new approach to a streamlined, simplified, cost-effective IPO sails through its maiden voyage.”
Some successes for Reg A+ include:
- Over 100 completed Reg A+ public offerings
- The average raise was about $8.8 million
- 9 companies used Reg A+ to IPO onto national exchanges
- Community banks found they can go public and raise money for growth from their many depositors with Reg A+.
- Real estate investment trusts (REITs) have successfully raised tens of millions to buy and renovate properties.
- Companies have been able to raise millions form their fans or customers without the help of an underwriter
Some Problems with Reg A+ include:
- The stocks of the issuers that went public on national exchanges with Reg A+ are trading down
- One of those issuers is being investigated by the SEC for alleged fraud
- NYSE has taken a pause on listing new Reg A+ companies
- Nasdaq has acknowledged extra levels of review for Reg As resulting in delays
What do think think? Has Reg A+ been a success, a failure, or too soon to tell?
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