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SeekingAlpha: Is Sarbanes-Oxley The Main Reason IPO Business Is Going Overseas?

SeekingAlpha: Is Sarbanes-Oxley The Main Reason IPO Business Is Going Overseas?

by Rick Turoczy on August 7, 2006

I’m not sure I buy these arguments. In the grand scheme of things, I doubt a couple of percentage points of IB fees would be the reason firms choose to list offshore rather than in the U.S. My own reading of the academic literature on IPOs (and granted, it’s not my primary area of expertise) is that firms going public focus far less on fee-related issues than on other matters (like the immense risks and payoffs associated with cashing out).

I think it’s far more likely that firms see the increased costs associated with SOX as just the tip of the iceberg.

SeekingAlpha: Is Sarbanes-Oxley The Main Reason IPO Business Is Going Overseas?

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