A new report from the Council of Institutional Investors (CII) underlines the risks posed to investors by a corporate structure called a variable interest entity (VIE). Sixty two percent of Chinese companies listed on U.S. stock exchanges use a VIE, including internet giants Sina, Baidu, Alibaba and JD.com. U.S. exchanges are experiencing a surge of Chinese VIE IPOs, with 20 filings this year, including 15 since September 1, compared to six in 2016 and seven in 2015. Continue Reading →
Tag Archives | IPO
Public Companies Endangered Species: CII Panel
Are public companies an endangered species? If so, why? How can we solve that problem? At last week’s Council of Institutional Investors (CII) Fall Conference there as an informative panel discussion entitled Public Companies: An Endangered Species?
Panelists were David Brown, Michael Mauboussin, and Robert McCooey moderated by the always erudite and entertaining Frank Partnoy, one of the best facilitators in the corporate governance industry. Continue Reading →
On January 12, 2015, Stanford’s Rock Center for Corporate Governance hosted a panel discussion called “The Rise of Controlled Corporations.” Unfortunately, this is one program at the Rock Center that I missed.
With Alibaba’s recent IPO on NYSE (instead of Hong Kong or China), the “one-share, one-vote” corporate governance standard has once again been challenged. Continue Reading →
After founders have raised funds from friends and family, and in some cases, angels, the next round of capital is likely to come from professional investors, usually venture capital (VC). Unless the demand for an investment opportunity is so great as to allow the founders to dictate the terms, it is likely that VC investment will be conditioned on election of a board comprised of a majority of independent directors. This brief article explores the reasons why such a demand for founders to cede control can be expected as well as some of the benefits founders may not have considered from such a requirement. The differences and confusion between “independent,” “outside,” “non-management,” and “disinterested” directors are also briefly explained.
1. Founders cede control because it is someone else’s money.
The March/April edition of The Corporate Board contains several excellent articles. I e-mailed a couple of quotes from their ‘Spoken & Written’ section to a CEO who needs a real board, instead of a rubber stamp. Continue Reading →
I attended this discussion between Professor Joe Grundfest and Vice Chancellor J. Travis Laster, Delaware Court of Chancery at the Rock Center for Corporate Governance on March 10, 2014.
Many Silicon Valley companies are marked by the presence of dual and triple class Continue Reading →
Sorry to be late and abbreviated in getting out my coverage of this great forum. Be sure to check out the Forum’s photo gallery, which contains many more and much better shots than what I took between notes and conversations.
The second panel discussed the growing issue of dual-class stock structures. While there was considerable debate, my sense is that most in the room see the advantages of such structures do not outweigh the disadvantages. I would like to see more discussion in the broader press about these issues when dual-class companies are going public. Maybe the discount would be even steeper. Continue Reading →
As the United States continues to rebuild its economy, the JOBS Act will impact businesses and financial markets. Legal practitioners, scholars, and students must be proficient in the legal and business aspects of the JOBS Act. This symposium will facilitate discussions of potent topics related to the future of securities transactions regulated under the JOBS Act and the impacts these transactions will have on the practice of law. Continue Reading →
It had been months since I’d attended an SVNACD breakfast meetings. Top talent was on hand, both among the panelists and in the audience. The facility at Wilson, Sonsini, Goodrich & Rosati was great. Sorry about photo quality… first time working with a new camera that I may not keep.
As usual, my notes are cryptic, without much of an attempt to thread coherent sentences. I’m tempted to say the following is for entertainment purposes only, but that would be too escapist. Corrections, comments and better photos are welcome.
My purpose is to provide readers with a sense of what was discussed and highlight a few areas. It may help you know what to investigate further and you’ll be that much more incentivised to attend in person to get answers to your concerns. Continue Reading →