JOBS Act to Jumpstart IPOs

IPO

By most accounts, the JOBS Act will likely become law and the rules for new issues should help to streamline and ease the IPO process.
 
Yesterday, the Senate passed he Jumpstart Our Business Startups Act (JOBS Act) (73-26 votes) with broad bipartisan support.  Its version of the JOBS Act will require approval from the House of Representatives (remember that a few weeks ago the House voted 390-23 in favor of a similar version of the law), after which it will go directly to President Obama’s desk for signature.  The White House has previously endorsed the legislation.
 
According to a recent report from the legal minds at Latham & Watkins, the JOBS Act, which is a combination of several different bills, contains certain IPO-related provisions related to corporate governance and financial reporting standards that should:

     

  • make it easier to go public;
  • provide significant cost savings for the IPO process;<
  • allow issuers to gauge investor interest before filing a registration statement;
  • permit confidential initiation of the SEC registration process;
  • streamline the requirements for financial statements;
  • permit analyst research immediately after the IPO; and
  • provide transitional relief for some companies up to five years from more costly requirements such as hiring an independent auditor.

 
Those supporting the bill believe it will encourage small businesses to grow and hire more workers. Further streamlining the IPO process enables companies to gain access to needed growth capital to fuel their expansion needs.  Reducing red tape should give an added boost to entrepreneurs seeking to launch new business start-ups, but it also could spur others to illicitly benefit from less stringent rules at the Securities and Exchange Commission.
 
While this should be viewed as a positive step forward, it also reminds investors of all stripes to carefully seek out and read all company filings before laying down the green.

 

PondelWilkinson, investor@pondel.com
 
 

Video Killed the Radio Star

How much is a YouTube view really worth if the view comes from hiring a marketing firm?  Earlier this month, the L.A. Times reported that Los Angeles City Atty. Carmen Trutanich paid for YouTube views for his campaign videos promoting his run for district attorney.
 
His videos boasted 725,000 views, with the most popular clip surpassing any campaign video from GOP presidential candidate Mitt Romney, Newt Gingrich or Rick Santorum, according to the Times.
 
Sounds like payola to me.  But I wonder if some videos need “primer” views to promote organic views. Consider the psychological effects of viewing a clip with tens of thousands of views versus a couple dozen.   The more people that view a clip the more likely other people will view the same clip.  Before you know it, the video goes “viral” and begins to prompt some sort of social movement.  And then, perhaps, a politician is elected, a brand gets sticky, or a warlord is overthrown.
 
By now, many of us have heard about the Invisible Children video that net almost 80 million views in about a week.  Are all of these views organic?  Beats me, but the video’s content is very compelling and probably could have drummed up at least a million views without any help from fluffers.

Video Views

YouTube Video Views

 
The bottom line is that the digital world values transparency, and if you are going to hire a marketing firm to bolster views, perhaps disclosing this fact in the first few seconds of the video would actually enhance the credibility of your message.  After all, it’s a lot easier to disclose upfront that you are artificially inflating video views, as opposed to suffering the consequences of someone else, i.e. the media, disclosing this fact.
 
Even better yet, how about producing video content that is actually worthy of bona fide viewership?

 

– Evan Pondel, epondel@pondel.com