Themis Thoughts September 21, 2012
The work of David Weild, Ed Kim and Lisa Newport of Grant Thornton’s Capital Markets practice was referenced September 20th during a Bloomberg Television interview with Themis Trading LLC entitled, Stock-Order Rebates Should be Stopped. Specific reference was made to the recently published paper, “The Trouble With Small Tick Sizes.”
In the paper, David, Ed and Lisa argue that small tick sizes have destroyed the economic incentives of traditional broker-dealers, which has helped to decimate the IPO market:
"While these regulations were meant to reduce trading costs for investors, they have resulted in unintended consequences that are significant — decreasing the number of small-company IPOs, increasing the management burden of being a public company, and leaving a one-size-fits- all U.S. stock market where only big brands and big stocks can sustain adequate visibility with investors."
Need Job Growth? (welling@weeden)--Capital Markets Director David Weild talks about how fixing Wall Street's broken IPO machine is the ticket to job growth in this interview with Kathryn M. Welling.
Facebook Should Think Twice Before Shunning Investment Banks, (Fox Business)– Capital Markets Director David Weild talks about the Facebook IPO and expresses concern about the company’s possible “go it alone” strategy. Weild argues that a transaction of this size requires the guidance of investment bankers who will understand how to direct the IPO allocation.
How to revive small-cap IPOs, (The Wall Street Journal) – Capital Markets Senior Advisor David Weild shares ideas for reviving small-cap IPOs by taking a look back to 1998—when a change in trading rules reduced commissions and trading "spreads,” making it unprofitable for trading desks and stock brokers to focus on smaller-cap stocks.
Global stocks stifle small U.S. startups, (The Washington Times) – While promising more efficiency for investors in global stocks, the New York Stock Exchange plans to merge with Germany’s Deutsche Borse. What will this mean to small U.S. enterprises? Capital Markets Advisor David Weild discusses his views on the merger and trends in the broader capital markets.
Will the market return for small company IPOs? (The San Diego Union-Tribune) - At the San Diego Venture Forum, capital markets icon Bill Hambrecht and Grant Thornton Capital Markets Advisor David Weild discuss the current IPO market and steps the SEC can take to encourage capital formation for small IPOs. Bill and David offer their insights on how to bring back the $20 million-$30 million IPO.
Survey: More Foreign IPOs coming to U.S., (CFO.com) - About one third of the IPOs on the U.S. exchanges last year were foreign issuers. Will an increase in foreign IPOs reverse the severe erosion in the public company universe and drive the IPO market in 2011? Senior capital markets advisor Ed Kim comments on this trend.
Wall Street, the Home of the Vanishing I.P.O. (The New York Times)
Even with General Motors (GM) returning to the New York Stock Exchange, the nation's stock markets seem to be getting smaller, not bigger. According to data firm Dealogic, this year alone, Chinese companies introduced 391 global I.P.O.'s, worth $89.5 billion. The 99 I.P.O.'s by American companies listing in the U.S. were worth $15.69 billion. How will the dwindling number of I.P.O.'s hurt the competitiveness of our nation's economy?
Death of the IPO (Institutional Investor)
As the media, investors and the investment banks swarm around companies selling shares to the public, what's lost is that this year's 90 completed IPOs is a paltry figure when viewed in historical terms. What will it take to revive the IPO market?
From Bankers to Speculators, (Barron's)
Under the SEC reforms, investment banks and bankers were transformed from socially useful capital-raisers to socially harmful, too-big-to-fail problems for the U.S. taxpayer. It was not a good trade.
How the stock market is killing jobs (MSN Money)
Today’s rapid-fire, anyone-can-play market makes it tougher for small companies to raise money to grow and hire. Do we need a new market to save the economy? Find out what two Grant Thornton Senior Capital Markets Advisors think.
Are small IPOs dying a slow death in India? (Moneycontrol.com)
India follows U.S. trends as investors focus more on investing in medium to large companies rather than small players. In an interview on CNBC-TV18's show, Your World @10, Harish HV, Partner-National Management of Grant Thornton India and Prithvi Haldea, MD of Prime Database spoke about the market structural changes emerging with retail investors in India.
To Create More Jobs, Foster More IPOs (Investor's Business Daily)
Grant Thornton LLP CEO Stephen Chipman offers his opinion on creating jobs by fostering more IPOs. As Stephen indicates in the article, the U.S. must restore the ecosystem that supported the allocation of capital to small companies. Resuscitating the U.S. IPO market will help drive economic growth and employ millions of Americans.
American Stock Markets, High-speed slide (The Economist)
Is what is good for cutting-edge traders bad for the market as a whole? Are we experiencing a “Great Depression” in the number of listed companies?
No IPOs Means No Jobs (Forbes.com)
Senator Kaufman cites A wake-up call for America, a study conducted by Grant Thornton that demonstrates equity market structure changes and an insufficient IPO market are causing some of the bloodshed in employment.
Weak IPO Market Has VCs Hoping For Private Trading (Investor’s Business Daily)
With the market for initial public offerings ailing, some in the venture capital industry have high hopes for new private markets for trading shares of startup companies. Will these private markets provide the exit strategy many small companies need?
Private Share Market May Supplant IPOs (Investor’s Business Daily)
Pascal Levensohn, founder of Levensohn Venture Partners and an NVCA director, says “IPOs raising less than $50 million are becoming extinct” and “making the 144A market more liquid would help the VC industry”. David Weild, co-author of A wake-up call for America and Capital Markets Advisor at Grant Thornton agrees, “Reforms in public and private markets are needed to aid small companies in raising capital.
Second Market – Canary in the Coal Mine? Silber says Yes. (PE Hub)
Barry Silbert from SecondMarkets wants regulatory reforms and suggests the SEC allow private companies to have more than 500 accredited shareholders. When companies cross that limit now, they have to file to go public, so they hesitate to use their stock to make acquisitions and key hires.
Should the U.S. have twice as many listed companies as it does today? (Squawk Box CNBC)
David Weild,Capital Markets Advisor at Grant Thornton believes so. Based on A wake-up call for America, a Grant Thornton study, market structure changes implemented over the last decade are causing significant secular decline in the number of publicly listed companies in the United States.
IPO “Crisis” Crushes Small Caps, Grant Thornton Contends (CFO.com)
The market for initial public offerings — particularly among small-caps — is mired in a crisis, Grant Thornton senior advisor, David Weild contends. The debacle has been caused largely by wrong-footed regulatory and technological moves, rather than the downturn in the economy.
Why the US IPO Market is in Decline and How We Can Fix It (Private Equity Professional digest)
The loss of the IPO market in the United States is due largely to changes in market structure commented David Weild, Senior Advisor to Grant Thornton. “By killing the goose that laid the golden egg of U.S. economic growth, the combination of technology, legislation and regulation undermined investment in small cap stocks, drove speculation and killed the best IPO market on earth.” Find out how it can be fixed.
IPO Report is Nostalgic for 1996 (PEHUB)
David Weild, Senior Advisor at Grant Thornton wants to turn the clock back, at least in some ways, to the idyllic IPO market days of the mid-1990s where venture capital flowed, an average of 500 IPOs per year were the norm and $10 million IPOs succeeded.
IPOs: Boom or Bust? (FOXBusiness.com/LIVE)
Edward Kim, Senior Advisor at Grant Thornton appeared on FOXBusiness.com/LIVE to discuss why the current IPO trend is a fluke and what the future holds.
Market Structure Redux: Can the Capital Markets Be Re-Formed on a Broken Foundation? (MarketsMedia)
The U.S. continues to lose global ground as it falls further behind other developed nations. Senior adviser to Grant Thornton, David Weild has long been aware of the mounting problems of our capital market structure and provides insights on a parallel public market option designed to support the IPO market and small cap companies.
IPOs Through Year-End (Forbes.com)
Is there anything to get excited about with just 12 companies filing for an IPO this month? “The disorganized state of the IPO market is not a cyclical downturn in the IPO market but a structural problem that may never go away," cites Edward Kim, senior adviser at Grant Thornton.
The Slow Degradation of the IPO Market (ACG – Mergers & Acquisitions)
If the public market is no longer available to today’s innovative companies, where can they go for capital? David Weild and Ed Kim, senior advisors at Grant Thornton Capital Markets Group, provide commentary on how to trigger rejuvenation in investment activity and innovation.
Wall Street Pay and Misguided Outrage (Directorship)
Is Wall Street pay merited or a sign of fiscal irresponsibility? David Weild, a senior advisor at Grant Thornton provides thoughtful and thought-provoking critique and analysis of current pay practices on Wall Street.
Look at All the New IPOs (BusinessWeek)
After months of market turmoil, are investors finally ready for a slew of brand-new stocks? More private companies are going public - and the new companies are outperforming blue chips. Grant Thornton's Harris Smith, managing partner of private equities and David Weild, senior advisor provide comments on what this new trend may signal.
Beggars Can’t Be Choosers (Forbes.com)
David Weild, senior advisor to Grant Thornton comments on the FDIC’s proposed new standards for private equity firms that want to buy troubled banks. Do these new standards mean more bank insolvency and less recovery?
IPO window may be opening, but many still looking in (SNLFinancial)
Some experts say a market return for IPOs could come by the end of 2009. However, according to David Weild, senior advisor to Grant Thornton, poor market conditions have made it difficult especially for smaller companies.
Suggestions for reinvigorating the IPO market (VCExperts.com)
David Weild and Edward Kim, co-authors of the Grant Thornton study, "Why are IPOs in the ICU?" offer their candid and provocative views on the IPO market and describe an opt-in capital markets solution that will trigger rejuvenation in investment activity and innovation.
How To Fix America's IPO Problem ( TheStreet.comTV)
David Weild, Senior Advisor to Grant Thornton, says the drought of U.S. IPOs is due to a structural problem, not the downturn in the economy. Listen to his plan to solve the crisis.