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“The irony of Sarbanes-Oxley was that it was intended to prevent more Enrons and Worldcoms but it ended up being a gigantic tax on small companies.”

‘The Sarbane-Oxley Act has ironically made the stock market less attractive instead of a safe haven for the average investor.’ 

Gone are the days where companies are going public with cheap valuations. This article from AVC.com rightly states that following the regulatory acts, companies such as Facebook and Twitter would choose to wait for themselves to be worth multi-billions, before engaging in public offerings. Unlike that of the past, where we saw Microsoft, IBM and Apple with cheap valuations, companies such as Dropbox are moving towards private financing, with amounts as large as $10 billion.

Such a trend is definitely not healthy, and would definitely affect the options value investors would have in the market should it continue. Read the original article at http://avc.com/2014/06/the-law-of-unintended-consequences/

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About bambooinnovator
KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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