“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.”
July 2, 2014 Leave a comment
‘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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