U.S. Initial Public Stock Offerings and the JOBS Act [September 27, 2012]   [open pdf - 500KB]

"Over the past decade, many sources have reported a precipitous decline in the number of initial public offerings (IPOs) in the United States. These statistics raise several questions: what has caused such a decline? What are the implications for the U.S. economy, and particularly for job creation? At the same time as IPOs appear to have fallen, the amount of private stock offerings has increased, suggesting growth in an alternative source of equity financing. This report analyzes factors contributing to the decline in IPOs, differences between an IPO involving the sale of shares to the public versus a private stock offering limited to sophisticated investors, and potential economic implications of such a rise in private versus public stock offerings. It also provides analysis of the causes and implications of the stagnation in public IPOs. [...] Enacted on April 5, 2012, in the 112th Congress, the Jumpstart Our Businesses Startup Act (JOBS) Act (P.L. 112-106) is broadly aimed at stimulating capital formation for companies, especially for relatively new and smaller ones. Among other things, the JOBS Act lifts certain impediments to a small company external financing technique known as crowdfunding, establishes a category of firm known as an emerging growth company (EGC), and relaxes various disclosure and accounting requirements for such firms."

Report Number:
CRS Report for Congress, R42427
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