In the recently concluded first quarter, both the NYSE and the NASDAQ saw more IPOs than in any other quarter since the last bubble. All told, 64 companies, including many that are far from profitability, raised $12.1 billion during the period. This stands in stark contrast to the stock market a year ago, which saw relatively few IPOs, despite the fact that there was plenty of activity in terms of startups and young companies. At the time, one of the popular reasons given for the lack of IPOs was the Sarbanes-Oxley "tax", which was seen as an undue burden on small companies. This view, a popular one among venture capitalists, was bolstered by the fact that a number of companies, which in the past would have probably listed on the NASDAQ, were opting to go public in London, where they could escape Sarbanes-Oxley. Also, the rise of private equity and management-led buyouts gave credence to the idea that Sarbanes-Oxley made it not worthwhile to be public. So, then, does the resurgent IPO market discredit the Sarbanes-Oxley complaints at all? Certainly, Sarbanes-Oxley still represents a significant cost for small companies, and there's almost no other explanation for why American companies would list in London rather than their home market. But, seeing as the IPO comeback coincides with record highs for the stock market, it would appear that economic cycles must be playing a pretty significant factor. This doesn't dismiss the Sarbanes-Oxley explanation, but it does suggest that it's just one of a number of factors, rather than the dominant one.
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