Retreat from Capital Markets Continues
Kinder-Morgan, HCA, numerous small companies that you've never heard of, and now Cablevision. The list of companies that have decided to abandon the public capital markets, because of the high cost and onerous regulations are not worth the benefits of a public listing, is growing.
posted by Donny Baseball at 11:49 AM
2 Comments:
I think the major reason for going private is valuation. The market, for whatever reason, is not valuing these companies correctly at the moment. There is inefficiency somewhere, and certainly Sarox could be a major factor. On the other hand, maybe it's something else.
Sarbox is a much more powerful incentive for smaller companies as the compliance costs are a much higher percentage of revenues than at a large company. Still, large companies add SARBOX compliance costs to various SEC compliance reg's costs, shareholder lawsuit insurance, SEC reviews, state AG probes, etc. and they determine that all this ain't worth it. For a big company I would argue that Sarbox was the straw that broke the back.
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