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You may have heard of the unusual frequency of technology companies going public without proven sustainable revenue streams. Interestingly, this is one of the few Initial Public Offering (IPO) trends that is increasing, because IPOs as a whole are actually on the decline.
In 2012 the overall number of Initial Public Offerings reached near historic lows. While the still shaky state of the economy and uncertain long-term fiscal policy certainly have something to do with that, more caution by investors have also played a role. After all, investing in IPOs is an inherently risky business.
An infographic featured via KapitallWire illustrates the decline in IPOs. While this might have been expected, it is interesting to observe how new compliance costs and the shifting preferences of entrepreneurs, may continue this downward trend.
A bullish JOBS-era investment market, combined with a tougher post-recession regulatory environment, makes for interesting times. Companies considering, on the verge of or launching IPOs need to pay careful attention to several crucial points, such as ensuring that controls are put in place for financial reporting and the dissemination of information and statements to the public, according to a recent article via This Is Real Law.
Companies should also assess whether they are being sufficiently transparent about past and current financial performance and future prospects.
Article Risky Business: More IPOs Could Lead to More Litigation courtesy of This Is Real Law
The Decline of The IPO Continues (Infographic) courtesy of KapitallWire