New Reports Turn Over Conventional Wisdom On... >>
<< Feds' Edict To Encrypt Hard Drives Gets -- You...
 tdicon 

Wall Street

by Joseph Weisenthal

Tue, Jul 17th 2007 6:51pm




Filed Under:
markets, private equity, stock exchange

Companies:
apollo, goldman


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.

5 Comments | Leave a Comment

If you liked this post, you may also be interested in...

Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Lawrence D'Oliveiro, Jul 17th, 2007 @ 7:38pm

    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?

     

    [ reply to this | link to this | view in thread ]

  2.  
    identicon
    Lutomes, Jul 17th, 2007 @ 8:03pm

    Re: What's In It For The Investors?

    They get the advantage of higher profits due to lower compliance costs. Yes there is an increased capital risk. But many of the institutional investors are willing to take that burden.

    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.

     

    [ reply to this | link to this | view in thread ]

  3.  
    identicon
    Sean, Jul 18th, 2007 @ 12:57am

    And the cycle begins anew...

    the reason why there's such a regulatory burden is that it's a proven fact that companies won't disclose unhappy news unless they're forced to - and C-level officers will in fact lie through their teeth to get big fat bonuses and paychecks.
    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.

     

    [ reply to this | link to this | view in thread ]

  4.  
    identicon
    Anonymous Coward, Jul 18th, 2007 @ 5:58pm

    Re: Re: Compliance Costs

    Thats a lot of hooey! Compliance costs do not reduce profits THAT much.

    Institutional investors are willing to take that risk because it is other people's money.

     

    [ reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Jul 23rd, 2007 @ 11:37am

    SEC

    The compliance issues would only get around listing and trading practices set forth by the exchange boards (NYSE, CBT, NASDAQ, etc). If they are based in the US they all have to still abide by SEC regulation, and if they want to allow the public/brokers/investment firms to trade on them they still have to obey the six big investment acts. Earnings filings, SOX logging, fraud, etc are enforced by the government.

     

    [ reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
New Reports Turn Over Conventional Wisdom On... >>
<< Feds' Edict To Encrypt Hard Drives Gets -- You...
 tdicon 
Follow Techdirt
Flattr rss rss
A word from our Sponsors...
Sponsored Resource
Essential Reading
Techdirt Reading List
Techdirt Insider Chat

A word from our Sponsors...
Recent Stories

Saturday

9:00am: Awesome Stuff: Cool Product Designs (0)

Friday

7:39pm: Rice University Professor: SkyNET's Gonna Take Ur Jerbs! (31)
6:33pm: Make Art, Not Law (7)
5:27pm: AP's Attempt At DRM'ing The News Shuts Down (11)
5:00pm: DailyDirt: DIY Junk Food (3)
3:40pm: Suburban Express Goes Double Or Nothing On Their Aggressive Behavior (6)
2:34pm: Want To Destroy Any Hope Of Serious Cybersecurity? Give The DOJ Its Desired Backdoor Wiretaps On All Communications (18)
1:34pm: Nintendo Exchanges Goodwill For Control; Issues Mass Monetization Claims On Let's Play Videos (30)
12:32pm: Indian Publishing Firm Can't Take A Little Criticism, Threatens Blogger With $1 Billion Lawsuit, Criminal Charges (8)
11:29am: Lots Of People Don't Turn Off Their Devices When They Fly (95)
More arrow
A word from our Sponsors...

Close

Email This