As a number of not-well-known companies have begun to follow the steps of declining Facebook IPOs last month, disclosing the shares as investors are aware of smaller and shortage risks in exchanging experiences. However, they go beyond the more traditional risks involved in accessing the US stock market, and many of the potential risks are extended to Jumpstart Our Business Startups (JOBS). In fact more than a dozen companies did just last month, citing that the lack of disclosure requirements for law could be deterrent for many potential investors.
This development is only one of the random results of the JOBS Act, as the associated disclosure standards are being exploited, and companies are denied by investors whose trust is endangered by action information policies that require certain information to be retained. According to this law, companies with revenues of less than $ 1 billion a year – As emerging growth companies – up to five years after their first public bidding before they are expected to comply with all the rules and rules they have larger counterparts. For example, they are exempted from delivering a vote without payment, they only have to submit two financial audits to the SEC, and perhaps the most important thing is that they do not have to sign their audits to the auditor.
These factors are that many companies have started listing, while pointing out that their emerging growth chances may fall faster if they meet certain criteria, for example, if the market cap exceeds $ 700 million, their annual revenue exceeded $ 1 billion , or if they generate a similar amount in convertible debt. All emerging growth companies targeting IPOs that did not include the JOBS Act as potential risks in their disclosure were constantly advised to consider this as an extra risk management tactic . This extra step is a simple tool for companies to assure themselves of potential problems that may arise in the future and to help investors differentiate themselves and other publicly traded companies.
Given the complex nature of corporate governance, the small potential risk statement seems to be the most preferred way for companies that are affected by the act. If in the future there is some unforeseeable complication due to reduced publicity policies, the company in question simply points out that these risks come from the very beginning. At the same time, it is important for investors to be aware that although as a result of the JOBS Act Company Stocks do not see a high price that can be leased or marketed in large quantities, this does not mean that there is anything wrong with these companies, or that certain negative revelations will be expected at the end of the five-year period.
Source by sbobet