Private Equity Firm To Go Public On Private Exchange
from the mind-bender dept
Whether it's shareholder lawsuits, political interference or Sarbanes-Oxley, there are plenty of reasons for companies to want to avoid the public markets these days. Still, public markets represent a good way to both raise money and give a company's principals liquidity. Private equity firm Apollo Management has announced that it will sell its shares on a private stock exchange established and managed by Goldman Sachs. The exchange is only open to institutional investors, which will allow Apollo to avoid unwanted regulatory scrutiny, while generally relieving it of many other burdens that face public companies. While Apollo will still have to communicate information with investors, it should have a lot more flexibility than the current public system allows for. If Goldman Sachs' exchange can garner a critical mass of listed companies and institutional traders, it, and others like it, should represent an interesting alternative to traditional markets.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: markets, private equity, stock exchange
Companies: apollo, goldman
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What's In It For The Investors?
So companies offering shares on this exchange will have less of a compliance burden than those on public exchanges. That means that investors buying shares on this exchange will have less information available to them than on public exchanges. So why are they going to be attracted to a system that seems to disadvantage them?
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Re: What's In It For The Investors?
Not only that but the investors don't have to worry about making "mum & dad" investors happy. They can make/encourage the company to tie deals to things that could be mutually advantageous which isn't possible if you have to answer to thousands of other investors.
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Re: Re: Compliance Costs
Institutional investors are willing to take that risk because it is other people's money.
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And the cycle begins anew...
Investors go along with this because only-good-news investments make them feel warm and fuzzy inside.
Until it all goes Enron, and then these fskers will be screaming for the govt. to bail them out again.
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SEC
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