IPO market sharply down after Facebook fiasco
23 Jun 2012
As pressure to revamp initial public offering rules grows on regulators, a new study reveals falling interest among small companies planning to go public.
In the wake of the Facebook IPO fiasco in May, California Republican representative Darrell Issa, in a letter Wednesday to Securities and Exchange Commission chairman Mary Schapiro, called for an overhaul of the regulations governing pricing and disclosure in public offerings, among other measures.
Rhode Island Democrat senator Jack Reed, chairman of the subcommittee of the senate banking committee, told The Wall Street Journal that reforms were required to restore investor confidence.
Facebook's market value has slumped to under $90 billion, from $104 billion since the 18 May IPO. (See: Facebook IPO fails to live up to hype)
According to Issa, the sharp decline showed that at a minimum, the IPO process suffered substantial flaws.
Over the past decade, US IPOs have fallen to an average of 130 a year, from over 500 during the 1990s, according to the Dealogic.
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