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Public to Private: Current Market Trends
The number of public companies calling it quits and going private is increasing, just as the number of companies going public has decreased. The figures are staggering! With the crippling Sarbanes-Oxley changes and the added expense of new compliance regulations, more and more public companies are thinking about going private. Should you? This six-page white paper is a must for any officer, director or manager of an OTCBB traded company bearing the brunt of the market uncertainty in the wake of these changes. This tome profiles companies likely to be successful utilizing this strategy as well as advantages and disadvantages of same, as well as why many companies are opting out. Should Your Public Company Go Private? Circumstances Creating the Going Private Trend The number of companies going private is increasing, just as the number of companies going public has decreased. With the Nasdaq Composite Index dipping more than 70 percent since its high of 5,048 in March 2000 and today's increasingly complex and expensive corporate regulatory environment, more and more public companies are thinking about going private. The Sarbanes-Oxley Act of 2002 Fueling this exodus from the public market, in part, are the onerous regulations embodied in the Sarbanes-Oxley Act, (or Sarbox), of 2002. Recent filings with the SEC clearly illustrate that the new legislation drove many companies out even before the rules were finalized. Nationally, 46 companies have filed with the Securities and Exchange Commission to go private since the fourth quarter of 2002. President Bush signed the Sarbanes-Oxley Act into law in July 2002 with the hope that it would put an end to the mounting corporate scandals and accounting misdeeds in the U.S. Included in the Act are:
Sarbanes-Oxley also increased a public company's disclosure obligations and shortened its reporting timelines, thereby placing increased pressure on companies. Compliance with this act is an enormous burden for smaller companies and has resulted in increased legal and accounting costs exceeding $1 million annually in some cases. [continued...] Want to know more? Download the White Paper "Public to Private: Current Market Trends" for just $9.95. |
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