I appeared on Business In Vancouver Radio to discuss the factors that have contributed to fewer companies going public, a trend occurring in Canada, the U.S., and Europe.
The high costs associated with listing on the exchanges and meeting ongoing reporting issuer responsibilities (i.e. disclosure and corporate governance requirements) are keeping many companies from tapping the public markets. Coupled with this, regulatory changes in the various jurisdictions have made it easier for companies to go private. Also, private equity firms are playing a larger role in the market, providing financing, and in the M&A space, buying out public companies and turning them private. Finally, low interest rates have lowered the relative cost of capital, reducing the need to tap public markets for financing.
I discuss the implications stemming from the shift towards private market financing—for the firms, investors, the health of the exchanges and regulators. Click here to listen to the interview.