Abstract

http://ssrn.com/abstract=2155036
 


 



Facebook, The JOBS Act, and Abolishing IPOs


Adam C. Pritchard


University of Michigan Law School

October 1, 2012

Regulation, Vol. 35, No. 3, 2012
U of Michigan Law & Econ Research Paper No. 12-020
U of Michigan Public Law Research Paper No. 293

Abstract:     
The market for initial public offerings (IPOs) — the first sale of private firms’ stock to the public — is notorious for its swings from peaks to valleys. This paper argues that these swings reflect serious flaws in the IPO scheme, and that U.S. capital markets should move toward a more stable alternative. Specifically, this paper argues for a two-tier market system in which new stock issuers initially participate in a less-regulated private capital market of accredited investors and then, if they choose, they can move to a more regulated, broader public market. Likewise, firms currently participating in the public market can choose to move to the accredited investor market. Such a scheme would harness private markets to promote the public good while simultaneously eliminating the public bad of IPOs.

Number of Pages in PDF File: 7

Keywords: capital markets, initial public offereings, IPOs, private markets, accredited investor market, two-tier market system

JEL Classification: K00, K22, K23

Accepted Paper Series


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Date posted: October 3, 2012 ; Last revised: October 16, 2012

Suggested Citation

Pritchard, Adam C., Facebook, The JOBS Act, and Abolishing IPOs (October 1, 2012). Regulation, Vol. 35, No. 3, 2012; U of Michigan Law & Econ Research Paper No. 12-020; U of Michigan Public Law Research Paper No. 293. Available at SSRN: http://ssrn.com/abstract=2155036 or http://dx.doi.org/10.2139/ssrn.2155036

Contact Information

Adam C. Pritchard (Contact Author)
University of Michigan Law School ( email )
625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4048 (Phone)
734-647-7349 (Fax)

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