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Stradling

Publications & Interviews

Compliance Week
July 2017

Compliance Week interviewed shareholder Ryan Wilkins for a story regarding the steady decline in public offerings. In response to this trend and in an effort to encourage participation in the public markets, incoming SEC chair, Jay Clayton, announced that the Division of Corporate Finance will permit all companies to submit draft registration statements relating to IPOs for review on a non-public basis. Wilkins commented that control is always an issue when companies consider going public. However, he mentioned that “we have seen dual-class stocks come back to an extent in recent years. Issuers continue to have takeover defense provisions in their governing documents. There definitely are ways IPO issuers can protect themselves and have the founders maintain control if that is a main concern.” Another trend affecting companies’ decisions to remain private is that “the public fundraising market has become more sophisticated and many of the stronger private companies don’t have trouble raising money. The impetus for going public goes away or is at least mitigated.” Nevertheless, Wilkins thinks the SEC’s efforts will ultimately encourage going public.