How to Take the Risk Out of IPOs
March 2, 2010
By Paul Ausick, Contributing Editor, InvestorPlace
The market for IPOs appears to be getting better in the US. In 2008, just 43 new listings were offered; in 2009 the number went up to 63. So far this year, there are more than 100 companies lined up to go public.
One thing that may be helping the market for US IPOs is the perceived increase in transparency resulting from the 2002 Sarbanes-Oxley Act. Where SarbOx was once blamed for sending IPOs to London or Shanghai, now the effects of the act enhance the US's position as a leader in improving corporate transparency and governance.
It's also true that a listing on a US exchange gives a company access to the most liquid market in the world, as well as the prestige that goes along with a US listing. From year-ago lows, the S&P 500 index has increased by about 60%. The index fell from mid-January to mid-February, but has begun to recover its upward movement. That's good news for the IPO market."